After a slowdown in the first half of 2025, the S&P 500 is once again outpacing international markets amid new tariffs.
US Market on the Rise
The S&P 500 is finally catching up to international markets after being outperformed in the first half of 2025. Investors with diversified portfolios have leaned on non-US assets for returns, however, July is changing that dynamic. The US index is now outperforming major global ETFs tied to Europe and emerging markets, suggesting US investor confidence is justified for the moment.
Trump's Tariff Policy Against Brazil and Canada
While US markets are up, foreign assets are under pressure. The iShares MSCI Brazil ETF (EWZ), previously outperforming the S&P 500, is down 4.6% just in July. This drop follows President Trump’s imposition of a hefty 50% tariff on Brazilian imports, and the iShares MSCI Canada ETF (EWC) is similarly falling behind. Many companies within the S&P 500 appear insulated from these tariff impacts, offering a cushion that international funds currently lack.
Reclaiming Global Dominance
As the second half of 2025 begins, this dynamic is shifting back. Non-US global ETFs are trailing behind the S&P 500, erasing earlier gains. Investors who had committed to diversification at the start of the year are now witnessing US stocks pulling ahead again, putting pressure on global funds once deemed safe amidst an uneasy political climate.
The American stock market continues to thrive despite tariff concerns, with July potentially marking the point where the US reclaims its leadership on a global scale.
