Check a ranking of the best-performing equity indexes this year and the U.S. doesn¡¯t crack the Top 10. You won¡¯t find it in the Top 25, either. Double that, and the S&P 500 is still absent.

The tally needs to unfurl all the way to 66 before the world¡¯s most valuable equity index shows up ¡ª leaving it way behind Greece¡¯s Athex and even Israel¡¯s TA-35. It¡¯s one of the worst relative performances since the global financial crisis for the U.S. benchmark.

The underperformance is even more surprising given the S&P 500¡¯s 11% rally to countless records in 2025. But it¡¯s still trailing most developed market benchmarks like Germany¡¯s DAX and Japan¡¯s Nikkei 225, and lags behind gauges in South Korea, Spain and Ghana, when measured in dollars.

That last qualifier is critical, though not determinant. The U.S. currency has fallen 7.3% this year, helping to boost returns on foreign bourses in dollar terms. That¡¯s certainly the thrust behind gains of at least 39% in Colombia and Morocco.

But even in local-currency rankings, the S&P 500 comes in just 57th, hardly befitting of a measure home to the six most valuable companies in the world, along with the likes of Coca-Cola, McDonald¡¯s and Walt Disney.

The underperformance, market participants say, owes just as much to a broader shift in the mindset among foreign investors, who have started targeting domestic champions as President Donald Trump wages a global trade war. Tensions ramped up on Friday after the president renewed threats of tariffs on China. Even in the U.S., they¡¯re being more selective, with a focus on big tech rather than broad-based indexes.

Added to that is a growing sense of concern about political and fiscal stability in the world¡¯s largest economy. Trump¡¯s tax and spending bill is projected to blow out the deficit. The government has been shut down since the start of October, the president is increasingly threatening the central bank¡¯s independence and public investment decisions have become less policy-based.

Together, the moves have shaken confidence in America, weakened the dollar and helped stoke a torrid rally in gold. While long-term Treasury yields haven¡¯t exploded in any similar fashion, they¡¯ve been elevated relative to recent years.

¡°The deteriorating U.S. fiscal situation and increasing policy uncertainty are eroding investor confidence in the U.S. market, weakening the dollar, and prompting investors to explore opportunities in non-U.S. markets,¡± said Jasmine Duan, senior investment strategist at RBC Wealth Management Asia.

Of course, strategists have for years been predicting an imminent rotation away from U.S. equities and those calls have fallen flat. The dollar¡¯s slide has eased in recent weeks as political stresses mount around the world, from France to Japan to...