Emerging Markets Rise 8.55% as Bank of America, JPMorgan Upgrade Amid Trump's Tariff Threats and U.S. Asset Sell-Off

Emerging markets are poised to lead the next global bull run as investors increasingly shift away from U.S. assets amid growing concerns about the U.S. economic outlook. This trend has been fueled by a renewed 'sell U.S.' narrative following the U.S. downgrade and President Donald Trump's recent tariff threats. Major financial institutions such as Bank of America and JPMorgan have highlighted emerging markets as the primary beneficiaries of this shift, with JPMorgan even upgrading emerging market equities. The emerging market stock index has risen 8.55% year-to-date, significantly outperforming the S&P 500's 1% gain. Emerging market equity funds have attracted substantial investor inflows due to their attractive valuations, years of underweight positioning, and easing economic pressures after Trump paused tariffs earlier. Additionally, emerging market currencies and stocks advanced as investors sought alternatives to overvalued U.S. assets.