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But Trump’s moves in the early days of his administration have had the opposite outcome for the U.S. stock market.
The S&P 500, which for years had been soaring above the stock indexes of other countries, is now trailing major markets in Europe and China, as investors have started to pull money from the United States and reallocate it around the world.
Since Trump’s inauguration, the S&P 500 has fallen 6%, while the Dax index in Germany has risen 10%, and the Europe-wide Stoxx 600 index has gained more than 4%. Other U.S. indexes have fared even worse, as European markets have been buoyed by plans for military spending on the continent after Trump made it clear he wants those nations to do more to protect themselves.
The Hang Seng Index in Hong Kong has soared further, rising more than 20% since Trump took office in January, driven by the Chinese government’s efforts to stimulate its economy. Mexico’s IPC index, which is domestically focused and proving resilient to Trump’s steep tariffs, is 5% higher.
Even global markets that have slumped have managed to outperform the S&P 500. The FTSE All-World index has dropped 2.9% since the inauguration, weighed down by U.S.-listed stocks. Canada’s TSX index has dropped 2%. And the Japanese Nikkei 225 has fallen 3.6%. In recent weeks, Wall Street has sent out a raft of bank research notes, client presentations and trade ideas that recommend a pivot away from the United States. The recent withdrawal comes after years when the U.S. stock market was the envy of the world, attracting foreign investors looking for higher returns than their home markets could provide.
Many investors are still bullish on U.S. stocks over the long term and believe they will again outperform foreign stocks. But others are wondering whether the current moment could be the beginning of an inflection point, upending the long-running trend of U.S. exceptionalism in financial markets.
This article originally appeared in The New York Times.
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https://economictimes.indiatimes.com/markets/stocks/news/trumps-moves-are-boosting-stocks-overseas/articleshow/119093770.cms
