NEW YORK — When it comes to stock markets around the world, this year has clearly not been “America First.”
The U.S. stock market has risen in 2025 and isn’t far from its recent all-time high. But it’s climbed less than stock indexes in Mexico City, Paris, and Hong Kong.
The difference in performance has been so stark than an index of stocks from 22 of 23 developed economies around the world, excluding the United States, has trounced the S&P 500: a 7.5% rise through last Monday vs. 1.7% for Wall Street’s benchmark.
The split in performance has many causes, and if it continues, it would mark a sharp reversal following years of U.S. exceptionalism. The U.S. stock market has been the clear winner for so long among global markets in large part because the U.S. economy’s growth has been so much stronger and more stable than nearly anywhere else.
But the steep divide means many other stock markets now don’t look as pricey as Wall Street, where critics say prices for many stocks rose too quickly relative to their companies’ admittedly booming profits. And the Big Tech stocks that have accounted for more and more of the U.S. stock market as they kept soaring look particularly expensive to some.
Morgan Stanley strategist Michael Wilson said many of his clients in recent weeks have been asking if they should be focusing more outside the United States. That includes tech stocks from China, where an upstart called DeepSeek rocked the artificial-intelligence industry by saying it had developed a large language model that could compete with big U.S. rivals but at a much lower cost.
Central banks in other countries also seem much more willing to cut interest rates, a move that often tends to boost stock prices there. The European Central Bank eased rates in January, for example. A day later, the Federal Reserve in Washington said it would hold rates steady, and minutes from that meeting indicate U.S. policymakers may not move rates for a while given worries about how President Donald Trump’s tariffs and other policies could keep upward pressure on inflation.
The rise in the U.S. dollar’s value against other currencies has also helped big exporters from other countries. Some big U.S. companies, meanwhile, have already begun cutting their forecasts for upcoming profits in part because of the bite that a stronger dollar will take from their results.
At Amazon, shifting currency values erased about $900 million of its revenue during the latest quarter, which totaled $187.8 billion, for example. The tech giant said the pain will likely continue, and it forecasted an “unusually large, unfavorable impact of approximately $2.1 billion” for its revenue in the current quarter from currency shifts.
Professional investors have noticed. It’s still popular among global fund managers to bet on Apple, Nvidia, and the other five Big Tech U.S. stocks that make up the group known as the “Magnificent Seven.” But the recent outperformance for stocks outside the United States may show a “peak in investor conviction of U.S. exceptionalism,” Bank of America strategist Michael Hartnett wrote in a recent BofA Global Research report.