Commentary: Why foreign markets outperformed U.S. stocks during Trump's first year
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If you’re a stock market investor you might be feeling pretty good about how your portfolio of U.S.equities fared in the first year of President Trump’s term.
All the major market indices seemed to be firing on all cylinders, with the Standard & Poor’s 500 index gaining 17.9% through the full year.But if you’re the type of investor who looks for things to regret, pay no attention to the rest of the world’s stock markets.That’s because overseas markets did better than the U.S.
market in 2025 — a lot better.The MSCI World ex-USA index — that is, all the stock markets except the U.S.
— gained more than 32% last year, nearly double the percentage gains of U.S.markets.That’s a major departure from recent trends.
Since 2013, the MSCI US index had bested the non-U.S.index every year except 2017 and 2022, sometimes by a wide margin — in 2024, for instance, the U.S.
index gained 24.6%, while non-U.S.markets gained only 4.7%.The Trump trade is dead.
Long live the anti-Trump trade.— Katie Martin, Financial TimesBroken down into individual country markets (also by MSCI indices), in 2025 the U.S.ranked 21st out of 23 developed markets, with only New Zealand and Denmark doing worse.
Leading the pack were Austria and Spain, with 86% gains, but superior records were turned in by Finland, Ireland and Hong Kong, with gains of 50% or more; and the Netherlands, Norway, Britain and Japan, with gains of 40% or more.Investment analysts cite several factors to explain this trend.
Judging by traditional metrics such as price/earnings multiples, the U.S.markets have been much more expensive than those in the rest of the world.
Indeed, they’re historically expensive.The Standard & Poor’s 500 index traded in 2025 at about 23 times expected corporate earnings; the historical average is 18 times earnings.Commentary on economics and more from a Pulitzer Prize winne...