U.S. stocks have underperformed global peers in the first two months of 2025, with Chinese and European equities showing significant gains. The MSCI China ETF has risen 17%, the iShares Eurozone ETF is up 6%, and Alibaba Group Holding has surged 55%, compared to a modest 2.5% increase in U.S. markets. This represents a notable shift from the previous dominance of U.S. equities. The underperformance of U.S. markets is largely attributed to President Donald Trump's tariff threats during his second term, which have pushed investors toward markets perceived as more insulated from U.S. trade policies. Emerging markets, particularly in Asia, and European stocks have benefited from this trend. European equities are supported by expectations of interest rate cuts and relatively lower valuations compared to U.S. stocks. Meanwhile, Chinese stocks, once considered 'uninvestable,' are gaining favor, with companies like Alibaba leading the charge. Emerging markets in Latin America, the Middle East, and Southeast Asia are also seeing increased investment. Dubai's stock index has reached a record high, while Brazil is emerging as a standout performer due to its favorable valuations and lower exposure to U.S. tariffs.