Trump’s return could extend U.S. stocks’ dominance over global rivals

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S&P 500 trades at the biggest premium in two decades compared to international stocks

U.S. stocks are extending their lead over global peers and some investors believe that dominance could grow if President-elect Donald Trump can implement his economic platform without becoming mired in a full-blown trade war or ballooning the federal deficit.

“Given the pro-growth tendencies of this new administration, I think it’s tough to fight the battle against U.S. equities, at least in 2025,” said Venu Krishna, head of U.S. equity strategy at Barclays. The dominant role of massive technology companies in the U.S. economy and their heavy weightings in indexes such as the S&P 500 are helping drive that growth. The five largest U.S. companies - Nvidia, Apple, Microsoft,and Alphabet - have a combined market value of more than $14 trillion, compared with roughly $11 trillion for the entire STOXX 600, according to LSEG data.

Republicans’ lock on power in Washington - which could make it easier for Trump to enforce his agenda - prompted Deutsche Bank’s economists to raise their 2025 U.S. growth forecasts to 2.5% from 2.2%.

 

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