Over the past decade, the U.S. stock market has significantly outperformed global stock markets excluding the United States. This divergence in returns has been one of the defining features of global investing since 2015, with U.S. equities—especially large-cap technology stocks—driving much of the outperformance.
Annualized Returns (2015–2025)
SPY , S&P 500 Index(U.S.):
The S&P 500 delivered an average annualized return of 13.8% over the past ten years.
ACWX , MSCI All World ex U.S. (Rest of World):
Global stocks outside the U.S. returned an average of 4.9% annually over the same period
Year-by-Year Breakdown
Year SPX World ex U.S. U.S. Surplus
2024 23.9% 4.7% +19.2%
2023 23.8% 17.9% +5.8%
2022 -19.6% -14.3% -5.4%
2021 26.6% 12.6% +14.0%
2020 15.8% 7.6% +8.2%
2019 30.4% 22.5% +7.9%
2018 -6.6% -14.1% +7.5%
2017 18.7% 24.2% -5.5%
2016 9.8% 2.7% +7.1%
2015 -0.7% -3.0% +2.3%
Key Drivers of Performance
- U.S. Outperformance
The U.S. market’s dominance was driven largely by the rapid growth of technology giants (such as Apple, Microsoft, Amazon, and Alphabet), which benefited from strong earnings growth, global market reach, and significant investor inflows. - International Underperformance
Non-U.S. markets faced headwinds such as multiply choking sanctions and tariffs, slower economic growth, political uncertainty (notably in Europe), a stronger U.S. dollar, and less exposure to high-growth technology sectors. - Valuation Gap
By 2025, U.S. stocks are considered relatively expensive compared to their international counterparts, which may offer more attractive valuations going forward.
Recent Shifts (2025 Trend):
As of early 2025, international stocks have started to outperform the S&P 500, with European and Asian equities seeing renewed investor interest. Factors include optimism over economic recovery in China and strong performance in European defense and technology sectors.
Long-Term Perspective
- Historical Context
While the past decade favored U.S. equities, this has not always been the case. For example, during the 2000s, international stocks outperformed the U.S. following the dot-com bust. - Market Weight
The U.S. accounts for roughly 60% of global stock market capitalization and about 25% of global GDP, so its performance has a substantial impact on global indices.
Conclusion
- From 2015 to 2025, the U.S. stock market delivered nearly triple the annualized returns of global markets excluding the U.S., primarily due to the outperformance of large-cap technology stocks.
- While this trend has persisted for most of the decade, early 2025 shows signs of a potential shift, with international equities beginning to close the performance gap. Investors should remain aware of valuation differences and the cyclical nature of global market leadership.
- The main technical chart for U.S./ ex U.S. ratio indicates the epic reversal is in progress.