Citi analysts cut their recommendation for U.S. stocks to "neutral" from "overweight" on Monday after recession fears pummelled the market, arguing that the U.S. economy may no longer outpace the rest of the world in the coming months.

Meanwhile, cheaper and better alternatives have emerged to accelerate the shift away from US assets. The advent of China’s AI startup DeepSeek has called into question America’s technological dominance, while Germany’s plan to significantly raise spending is being hailed as a watershed moment in European policymaking.

It was bound to happen. A major U.S. investment bank, Citi, has downgraded U.S. stocks. Tariffs have created too much uncertainty, and so has the possibility of a gross domestic product (GDP) retreat.

Citigroup (C) downgraded its view on U.S. stocks while upgrading Chinese equities to overweight, in a move that signals increasingly bearish

Chinese shares look attractive even after their recent rally, Citi strategists wrote, citing DeepSeek’s AI breakthrough and still-cheap valuations.