US equity markets have steadied after recent volatility, and the Tech sector continues to attract the largest allocations. BNY iFlow data indicate that cross-border demand for US tech exposure remains firm.
Global allocations to the broader IT sector (GICS Level 1) are below 2025 highs. They are about 10% above the rolling 12-month average, which is already elevated.
Cross Border Tech Demand Remains Firm
Allocations are weaker than during the “US exceptionalism” period from 2023 to 2024. Even so, the cross-border “premium” is still present.
The text refers to turbulence in trans-Atlantic relations and mentions limited scope for decoupling. It also links continued tech-related outperformance to earnings delivery.
The article states it was created with the help of an artificial intelligence tool and reviewed by an editor.
US equity markets appear steady, and the technology sector continues to be the primary destination for global capital. This confirms the trend we saw developing throughout 2025, where international investors maintained their conviction in American tech. This sustained cross-border demand provides a strong underlying support for the sector.
Options Strategies For A Lower Volatility Tape
With the Nasdaq 100 already up around 8% this year after a strong January reporting season, implied volatility has been coming down. The VIX is currently trading near 17, well off its recent highs, which makes buying options relatively cheaper. This environment could favor strategies like purchasing call options on major tech ETFs to participate in further upside.
The persistent “premium” for US tech exposure suggests that selling cash-secured puts on leading semiconductor or software names could be a viable strategy. By doing this, we can collect income while setting a lower potential entry point for stocks we believe in long-term. This approach capitalizes on the view that any dips will be met with buying interest from overseas.
Looking ahead, the next major test for this trend will be the Q1 2026 earnings season, which begins in about two months. We observed how strong earnings reports for Q4 2025 validated the bullish positioning that built up late last year. Therefore, traders might consider establishing longer-dated positions, such as bull call spreads expiring after April, to capture potential positive surprises.
