International stocks returned ~33% to U.S. investors in 2025, far outpacing the S&P 500
International stocks outperformed U.S. equities in 2025, delivering roughly 33% returns to U.S. investors versus the S&P 500’s ~18%. An ETF tracking the MSCI All-Country World ex-U.S. returned about 33%, covering roughly 85% of non-U.S. investable equities. A weaker dollar — down roughly 9% on a currency basket — boosted dollar returns, but Goldman Sachs found most major foreign markets outpaced the S&P 500 even excluding currency effects. Notable country performances included Japan’s MSCI (~25% with a flat yen), South Korea’s benchmark (about 100% in dollar terms), and Spain (over 60% in euros). Valuation shifts drove much of the gains: international price/earnings-growth (PEG) gaps narrowed by about a third, though U.S. stocks still trade at a premium more than double the 2005–present average. Analysts including Yardeni Research and Goldman recommend reconsidering a U.S.-heavy stance; Yardeni said it “no longer makes much sense” to overweight U.S. equities. The MSCI ex-U.S. index is bank- and finance-heavy, but its top five stocks are tech names (TSMC, ASML, Alibaba, Tencent, Samsung), prompting calls for diversification within tech rather than assuming overseas markets simply replicate U.S. tech exposure. Risks remain: a stronger dollar, weaker foreign earnings, or U.S. valuation shifts could change outcomes in 2026. Key SEO keywords: international stocks, MSCI ex-U.S., foreign markets, S&P 500, dollar weakness, valuations, global diversification.
Neutral
This report is market-information positive for global equity allocation but does not directly change crypto fundamentals. International equities outperformed U.S. stocks in 2025 due to valuation rerating and a softer dollar; that trend encourages portfolio diversification away from U.S.-only exposure. For crypto traders, the immediate impact is neutral: improved appetite for non-U.S. risky assets can draw risk capital away from crypto in the short term, but a sustained move into global equities (and potential rotation across risk assets) may correlate with renewed investor risk tolerance that could be supportive for crypto later. Historically, large equity rallies driven by valuation rerating (rather than macro liquidity expansion) have produced mixed effects on crypto — sometimes reducing flows into speculative tokens when equities offer attractive returns, other times coinciding with broad market risk-on sentiment that lifts both equities and crypto. Key short-term considerations: possible dollar rebounds or foreign earnings shocks could reverse equity gains and push some risk capital back into crypto as a speculative alternative. Long-term, greater global equity performance and reduced U.S. home-bias can diversify systemic risk and change cross-asset flows, but they do not alter crypto-specific drivers (technology adoption, regulatory developments, network fundamentals), so crypto impact remains indirect and balanced.