US President Donald Trump’s promise to create an “age of American exceptionalism” has had the opposite effect on the country’s stock market. The S&P 500 index, once soaring above its global peers, now trails major markets in Europe and China. Investors have been pulling money from US stocks and reallocating it to international markets, driven by concerns over Trump’s tariff policies and deep government cuts.
Investment advisers are now steering clients towards ex-US markets, citing an uptick in conversations about increasing exposure to international stocks. Even global markets that have slumped have outperformed the S&P 500. The FTSE All-World index has dropped 2.9% since Trump’s inauguration, while Canada’s TSX index has fallen 2%.
Wall Street research notes and presentations recommend a pivot away from the US market, citing “resilience” in European markets and concerns over policy shocks. Market strategists believe there is room for international equities to grow.
Over the past week, investors pulled $2.5 billion from funds that buy US stocks for the first time this year, according to EPFR Global data. While some traders react quickly to market news, others may take months to reallocate their investments. A complete exodus by foreign investors is unlikely, but a shift could create market moves.
US markets were once a magnet for foreign investors seeking higher returns than their home markets offered. However, the recent withdrawal comes after years of US stock market dominance. Many investors remain bullish on US stocks over the long term, believing they will outperform foreign markets again.
Source: https://www.nytimes.com/2025/03/16/business/trump-sp-500-stocks-europe-china.html