The “Ex-America” Trade: Why Global Stocks Are Outperforming the U.S.

Since the start of the year, global stocks have outperformed the U.S. Market, a trend some analysts are calling the “Ex-America” trade. This shift marks a notable change from the past few decades, where the U.S. Market, driven by big tech companies, consistently led global returns.

Global Stock Performance in 2026

As of February 18, 2026, the S&P 500 is down approximately 0.5% year-to-date. Meanwhile, the MSCI EAFE index, which tracks developed markets outside the United States, has gained about 8%. The MSCI ACWI ex-US index, excluding U.S. Stocks entirely, is up roughly 8.5% ¹. Goldman Sachs research indicates this is the worst start to a year for U.S. Stocks relative to global markets since 1995 ¹.

Factors Driving the Shift

Several factors contribute to this outperformance:

• U.S. Dollar Weakness: A weaker U.S. Dollar can amplify the performance of global markets by affecting currency conversion rates. Though, the dollar’s recent decline of about 1% year-to-date and 9% year-over-year doesn’t fully explain the gains, suggesting stock outperformance is the primary driver ¹.
• Changing Trade Patterns: Fragmentation in trade patterns could boost growth in mature economies across Europe and Asia as countries shift away from U.S. Imports and focus on local production. This could lead to increased trade and stronger market performance in those regions.
• Reconsideration of Concentration Risk: After a decade of U.S. Dominance, global capital may be reconsidering concentration risk.

The Era of U.S. Dominance

For much of the past few decades, the U.S. Market has outperformed global returns, largely due to the dominance of big tech companies. From 2015 to 2025, companies like Nvidia, Apple, and Amazon – often referred to as the Magnificent 7 – propelled U.S. Performance while Europe and Asia lagged. However, historically, U.S. Performance hasn’t always been superior over the long term ¹.

Looking Ahead

The “Ex-America” trade may not be simply seasonal noise. It could signal a fundamental shift in global capital allocation as investors reassess risk and opportunity. The current volatile conditions, influenced by geopolitical factors and domestic policy uncertainties, make predicting future returns more challenging.

Goldman Sachs is currently offering fixed coupon notes linked to the S&P 500 Index and the iShares MSCI EAFE ETF, with a 6.5% annual coupon, maturing in February 2028 ¹. The notes offer a 20% downside buffer, but investors could lose their entire principal if either underlier falls more than 20%.

The MSCI EAFE Index is used in investment strategies by firms like Merrill Lynch Investment Advisory Program, seeking to track the index while enhancing after-tax returns ⁴. GS Finance Corp. As well utilizes the MSCI EAFE Index, with a pricing date expected around March 6, 2026, and a maturity date around September 10, 2027 ³.