economy

March 4, 2026

The U.S. is not the place to be for investors in 2026 so far. Where they are turning to for gains

International stocks remain compelling for investors even amid heightened fears from the U.S.-Iran conflict this week.

The U.S. is not the place to be for investors in 2026 so far. Where they are turning to for gains

TL;DR

  • Emerging markets stocks (EEM) are up over 7%, and non-U.S. equities (ACWX) are up over 5%, while the S&P 500 is down 0.3% year-to-date.
  • Reasons for this shift include a weaker dollar, rising commodities, geopolitical uncertainty, and AI concentration risk in the U.S.
  • The U.S.-Iran conflict caused a recent sell-off in emerging markets, particularly South Korea, but is not expected to derail the long-term thesis for international stocks.
  • Europe's STOXX Europe 600 is up over 3%, South Korea's Kospi is up 18% (driven by tech giants), and Japan's Nikkei is up over 4%.
  • Rising U.S. protectionism is prompting other regions, like Europe, to increase defense spending and form new trade partnerships.

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