By Naomi Rovnick

LONDON (Reuters) -An investor out of the United States and into Europe and Asia has reversed course as big money managers ride a wave of AI and interest rate-cut euphoria into the year-end, ditching the “rest-of-the world” trade for now.

Global fund managers had offloaded U.S. stocks at a record pace after President Donald Trump unveiled steep reciprocal tariffs on April 2. The market has recovered since then, however, and U.S. stocks have surged 7% in the last quarter.

Wall Street’s market supremacy is back and investors are likely to favor U.S. assets in the coming quarter as traders price in 110 basis points of Federal Reserve rate cuts by end-2026 and AI juggernauts boost analysts’ stock market targets and U.S. economic growth.

“There’s no need for pessimism right

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