US equities have been underperforming their global peers since Donald Trump resumed office in early 2025. The S&P 500, represented by the $SPY ETF, is one of the few G7 country ETFs to post losses during this period, while China’s $MCHI ETF has surged 19.7%. The MSCI World Index has gained 3.6% year-to-date, reflecting the broader strength of international markets. The underperformance comes despite a 2.2% year-to-date gain for the S&P 500, as international markets, particularly in Europe and Asia, have shown stronger momentum. European equities, such as the Stoxx 600, are near an all-time high, while Chinese stocks are at their highest levels in three years. Alibaba, a key Chinese stock, has traded green for 11 consecutive days. Analysts attribute the trend to a reversion to mean valuations for international stocks, which had been trading at steep discounts compared to US equities. Additionally, concerns over US tariffs and trade policies have driven investors to diversify their portfolios internationally.