Citi: Downgraded the rating of the US stock market, upgraded the rating of the Chinese stock market to overweight

Citi downgraded U.S. stocks to neutral from overweight and upgraded Chinese stocks to overweight, saying American exceptionalism has at least paused. A report by Citi strategists such as Dirk Willer shows that the disruption of American exceptionalism is now becoming more pronounced; the company has been overweight U.S. stocks since October 2023. Citi expects U.S. growth momentum to be lower than the rest of the world, though U.S. stocks could return to outperforming when the artificial intelligence narrative takes hold again. Given the strength of the Chinese tech sector, government support for the sector and cheap valuations, the Chinese stock market still looks attractive even after the market rally, according to Citi; "DeepSeek is proof that Chinese technology is at the forefront of Western technology and even surpasses Western technology," Citi said.