ACWX - Global Resilience: Why International Stocks Have Rallied Despite U.S. Trade Hostilities

2025-02-13 07:05:00 ET

Summary

• Despite the Trump administration's much-touted protectionist policies, key global indices such as China’s NASDAQ OMX Technology Index and Hong Kong’s Hang Seng Index, France’s CAC 40, Germany’s DAX, the UK’s FTSE 100, and Brazil’s Bovespa have outperformed the S&P 500 year-to-date.
• This appears to run counter to conventional expectations, which assumed that aggressive U.S. trade policies would weigh heavily and generally negatively on global markets.
• A closer look at investor sentiment, monetary policy, corporate adaptability, currency fluctuations, sectoral dynamics, and economic fundamentals provides insight into why global equities have had a very strong start to the year, even as U.S. policymakers continue to push for trade restrictions.

International stock markets have demonstrated an unexpected level of resilience in the face of escalating trade tensions. Despite the Trump administration's much-touted protectionist policies - marked by increased tariff threats, renegotiation of existing trade agreements, and what many have called a confrontational approach to China, Canada, and Mexico - key global indices such as China’s NASDAQ OMX Technology Index and Hong Kong’s Hang Seng Index, France’s CAC 40, Germany’s DAX, the UK’s FTSE 100, and Brazil’s Bovespa have outperformed the S&P 500 year-to-date at the time of this writing....

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