Is the dominance of the American stock market ended or is it a temporary break?

Many are arguing at Wall Street that investors should seek investment opportunities outside the United States, while financial analysts said: The American exception has ended.

According to the “Barons” magazine, these fears of the American market dominate since the 2008-2009 financial crisis, which prompted investment portfolios to rely on US assets. The rise in the American debt, which is now 37 trillion dollars, and uncertainty about customs duties has led doubts about the future of the American economic leadership.

These concerns are exacerbated by the reform of competing economies, such as Germany, its policies that disturb growth, while the American economy has suffered weak performance since the beginning of the year.

According to Elisia Levin, the head of the investment and stock strategy in BN Way Wilth, the exceptional American economy, not only to the gains of stocks, but also includes structural advantages in growth, productivity, innovation, attracting capital and transferring profits. That is why it is not expected that the situation will be changed soon.

Let’s take the gross domestic product first, it is the pillar of profit estimates. It is true that stock markets may not reflect the real economy, but they reflect the nominal GDP. Here, the superior performance of American stock markets is evident. Since 2010, the US economy has grown 43%, while Europe has grown about half of this rate, and a third of it in Japan.

The flexibility of the labor market and the reduction of regulatory restrictions gives the United States a clear advantage. The unemployment rate in the United States is 4.2%, compared to 6.2% in the euro area. Also, youth unemployment is 5% in Europe and 7% in China. Requests for creating new business in the United States have doubled over the past decade, while only 26% have risen in Europe. In short, capital and ideas find better results in the United States.

Moreover, the productivity of workers in the United States has been twice the productivity of the euro, Canada and the United Kingdom since 2010. This gap has expanded since 2019, as productivity in the United States has increased and shrinks in other regions. The US leadership in adopting artificial intelligence will increase from this disparity.

Besides, the size of the founding and investment capital – needed to finance innovations – is greater in the United States. More than 60% of American families have shares through brokerage accounts and individual retirement accounts, which are unparalleled investment levels in other markets.

America also features firm markets and unique liquidity. The state represents 64% of the market value of global shares, and 41% of fixed income tools with a global investment classification. About 58% of the global foreign exchange reserves are kept in dollars.

As for companies’ performance, the capital’s return on the United States is outperforming. Standard & Poor’s shares are 500%, compared to 13% in Europe.

Finally, concerns may spread about the dominance of the 10 largest American shares, which now constitute 36% of the Standard & Poor’s 500 index. But other countries are focusing worse, representing the 10 largest shares in China, Brazil, France, Germany and South Korea 50% or more of its indicators. Even the euro and Japan, with their leading shares about 28%. Therefore, global diversification in the portfolio does not abolish the risk of concentration.

It is understood that the poor performance of the American markets and uncertainty about the American trade policy this year has prompted a review of the state’s economic and market domination in the long run. As its profit expectations are close to the rest of the world, the US market’s performance may remain weaker throughout 2025.

But the basic factors are still in the interest of the United States, because of its unparalleled environment for growth, innovation and capital.

This year, investors have mentioned the benefits of diversification, but it should not be considered an end to American leadership. The United States is likely to continue to provide the best investment opportunities in the world.