Global changes in stock market trends: U.S. performance

According to a Bloomberg report, the animal spirit that has fueled the rapid rise of the U.S. stock market in the past two years is now growing globally. Since President Donald Trump’s inauguration, the S&P 500 has stabilized and investors have begun to turn their attention to European and Asian markets.

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Bloomberg stressed that the Stoxx Europe 600 index rose 5.8%, and the Nasdaq Golden Dragon Index, which tracks US-listed companies that operate with China, 18% in the same period. Meanwhile, the S&P 500 index only increased by 0.3%. Brad Conger, chief investment officer at Hirtle Callaghan, attributed the disagreement to long-standing extreme sentiment and positioning in U.S. stocks.

European and Asian markets show growth

Even though the U.S. market rally slows down, global stocks are growing. Indexbox data shows that the Stoxx Europe 600 has increased by 20%, while Golden Dragon has only achieved a 1% rate, even though the S&P 500 has soared 53% over the past two calendar years. Despite this year’s progress, European stocks’ price-to-earnings ratio is still attractive at the age of 14 compared to S&P 22 in 500, with China’s index of 17.

Mark Hackett, chief market strategist at National Investment Management Group, believes that this shift may be a secular trend, rather than a cyclical trend. Historical data show that such a wide performance and valuation gap last time occurred between domestic and international markets during the technology bubble, which led to huge market changes.

Change market trends

Now, investment flows prefer non-U.S. stocks. According to JPMorgan Chase & Co., Citigroup’s analysis also shows that there has been a huge shift in investor sentiment, and European stocks are now more popular than U.S. stocks.

In these dynamics, the global economic outlook stabilizes uncertainty around tariffs, which greatly influences sentiment in the United States. In addition, recent excitement surrounding Chinese AI startup DeepSeek has prompted investors to reevaluate the valuation of U.S. stocks, making Chinese tech stocks more attractive in the near term.

The future of diversified investment

As global markets continue to readjust, there is still reason to consider U.S. investment. Bank of America strategists led by Savita Subramanian highlighted the structural advantages of the United States, including energy independence and the reserve currency status of the dollar. Furthermore, the continued advancement of the country’s technology sector remains a significant attraction.

However, as Hirtle Callaghan’s Conger pointed out, the U.S. recalibration of AI expectations has made non-U.S. stocks attractive, thus challenging long-term beliefs about the U.S. market advantage.

Source: Index Box Market Intelligence Platform