Global investors are undergoing a structural rethink of their exposure to U.S. markets, according to economic expert Rebecca Patterson.

Patterson, who served as Bridgewater’s chief investment strategist, contends they’re gradually reducing exposure to U.S. assets and the impact could be significant. Her prediction comes after having conversations with participants in last week’s World Bank and International Monetary Fund meetings in Washington.

“There are a large number of foreign investors who are worried not only about tariffs, but just about America’s reliability as a partner,” Patterson said Monday on CNBC’s “Fast Money.”

Outside of the Trump administration’s tariff policy, she finds foreign investors and policymakers are losing faith in the U.S. on broader fears about the potential weaponizing of capital markets to achieve its economic goals.

That may put global investors’ U.S. holdings at risk, according to Patterson. Foreigners held more than $31 trillion of U.S. assets as of last June, according to the most recent U.S. Treasury data. That’s an increase of $4.4 trillion from the prior year. The gains came as U.S. markets reached all-time highs, thanks in part to megacap tech and the artificial intelligence trade.

“They are looking at a huge U.S. allocation that has built up over the last several years and saying, ‘maybe we should have a little bit less, just trim off the tops’ — basically, have a risk premium on U.S. assets because we have so much uncertainty,” she said.

Even a small reduction in global participation could present a problem for U.S. markets, Patterson warns.

“Pretend you’re the chief investment officer of a major overseas pension fund or sovereign wealth fund. I’m going to take 2% off my U.S. stocks, 2% off my U.S. bonds, a 4% shift,” she said. “That’s $1.2 trillion that is going to be leaving the U.S. now.”

A potential $1.2 trillion sell-off represents 2.3% of the S&P 500‘s total market capitalization, as of Thursday’s close. Still, Patterson emphasizes the capital flight will not happen overnight.

“These investment committees will take months to think about things. They’ll have a meeting, they’ll have a board approve it and then it gets implemented. But what this is, is a slow bleed of support out of the U.S. markets, either going back to home markets or into new opportunities, or things like gold,” said Patterson.

U.S. stocks have broadly underperformed other global equities so far in 2025, with the S&P down 4.7% in that time. Europe’s broad-based STOXX 600 index has gained 3.9% this year, while the MSCI AC Asia Pacific Index has risen 2.8% over the same period, per FactSet.

Warren Buffett has been mum about tariffs and the recent market turmoil, but will finally speak his mind when the 94-year-old investment legend kicks off Berkshire Hathaway‘s annual shareholder meeting on Saturday.

Tens of thousands of rapt shareholders will descend on Omaha, Nebraska this weekend for the annual gathering dubbed “Woodstock for Capitalists.” This year’s meeting marks the 60th anniversary of Buffett leading the company, and is the second without Buffett’s long-time partner Charlie Munger, who died in late 2023.

The biggest event in the Cornhusker State next to a Nebraska-Oklahoma football game, this year’s meeting comes as markets have turned uncertain after President Donald Trump’s aggressive rollout of the highest tariffs on imports in generations. (Many were suspended for 90 days afterward.) Wall Street economists left and right are sounding the alarms that a recession may be in the offing, as recent data pointed to signs of economic weakening.

“Because Berkshire owns so many businesses, they’re basically on the front lines of everything in terms of the economy falling off. Is it even worse than what the numbers are already showing?” said Steve Check, founder of Check Capital Management, which counts Berkshire as its largest holding. “I hope, more than anything, that he speaks out against the way tariffs have been done. Everyone is looking for what Warren Buffett has to say.”

Investors’ north star

The “Oracle of Omaha” may have already let his actions do the talking. Berkshire has sold more stock than it’s bought for nine straight quarters, dumping more than $134 billion worth in 2024. That was mainly due to reductions in Berkshire’s two largest equity holdings — Apple and Bank of America. As a result of the selling spree, by December Berkshire’s enormous pile of cash had grown to yet another record, at $334.2 billion.

The world is eager to hear if Buffett, the most famous advocate of value investing, used the April market meltdown to hunt for bargains and lay the groundwork for deals. Although Buffett doesn’t make predictions of short-term market direction, investors will listen closely for any signals of his continued confidence in the U.S. economy — despite the tariff shock.

“I think the big question on everyone’s mind is what will Warren do with the pile of cash that they are sitting on and, more specifically, when can it be deployed, as he can help investors gauge when the all clear sign is lit,” said David Wagner, a portfolio manager at Aptus Capital Advisors and a Berkshire shareholder. Many investors, he noted, “tend to view Warren as the north star.”

Buffett will make a few introductory remarks at 9am ET Saturday, followed by an hours-long question-and- answer panel. Buffett’s designated successor, Greg Abel, and Berkshire’s insurance chief, Ajit Jain, will join Buffett on stage in the morning, with Buffett and Abel alone in the afternoon. The Q&A session will be broadcast on CNBC and webcast in English and Mandarin.

Big Apple question

Shareholders are also curious for Buffett to explain his motivation in slashing his longtime Apple stake. After a head-turning selling spree for four quarters in a row, Berkshire’s Apple holding has stayed at an even 300 million shares since the end of September, leading many to speculate that Buffett is done selling the stock for the time being.

At last year’s annual meeting, Buffett suggested that the sale was for tax reasons following sizable gains. He also implied that selling down Apple could be tied to his wanting to avoid a higher tax bill in the future if rates went higher to fund the yawning U.S. fiscal deficit. With a change in government in Washington, shareholders want to hear Buffett’s reasoning today.

“You can’t use that explanation anymore because it clearly does not apply,” said David Kass, a finance professor at the University of Maryland. “If he sold more, it would indicate that he probably felt it was fully valued, or Warren Buffett being the genius that he is, he was able to see ahead at some of the risks that could face Apple, in case there’s a trade war and tariffs.”

Berkshire’s first-quarter earnings report, due Saturday morning, will show the conglomerate’s top equity holdings, which could give investors a hint as to whether the Apple stake was adjusted again.