"Part of what is happening here is that investors are using non-U.S. stock markets as a hedge against the dominance of AI-related stocks in the S&P 500. The "Magnificent Seven" tech stocks have provided more than half the gains in the S&P 500 over the last three years, according to Howard Silverblatt, a senior index analyst at S&P Dow Jones Indices."
"A bet on U.S. stocks is mostly a bet on a small number of tech stocks, and investors who want to balance that out thus need to go abroad. The U.K.'s FTSE for example is heavy on banks and mining companies -about as un-tech as you can get. Those hedges are likely boosting foreign markets, which are smaller and more easily moved upward by influxes of new money."
The S&P 500 gained 16.5% in 2025 and futures rose 0.62% as the index approached its all-time high of 6,932. The S&P lagged other global indexes: the FTSE 100 surpassed 10,000 and rose 21%, Germany's DAX climbed 23%, Spain's IBEX 35 rose 48%, and Greece's Athex Composite increased 45%. South Korea's KOSPI surged 75.6%, China's CSI 300 gained 21%, and Japan's Nikkei 225 added 28%. Gold rose 65% and silver 147%, while Bitcoin fell 7%. Investors used non-U.S. markets to hedge concentrated exposure to AI-heavy US tech stocks, boosting smaller foreign markets. Future S&P direction remains uncertain.
Read at Fortune
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