A Midsummer Check-In on Global Stocks

In and out of the US, the bull market is bigger than Big Tech. No doubt, as many note, Tech is riding high on the AI wave. But it isn’t the sole driver. Less noticed under the surface: The rest of the market, globally, is faring fine, too—and in some cases exceeding Tech’s gains. Let us take a tour of global markets to illustrate this very point as Q3 reaches the halfway mark.

First up, look within the US. The S&P 500 Energy sector—up 41.5% year to date—far exceeds Tech’s 24.1%.^[i] Tech may be the runner up, but Industrials’ 20.8% year-to-date gain and Materials’ 14.8% also exceed the S&P 500’s 14.0%.^[ii] Meanwhile, the worst performing sectors year to date are Tech-adjacent: Consumer Discretionary (-0.2%) and Communication Services (0.2%).^[iii]

Another way to picture the bull market’s broad-based strength: The equal-weighted S&P 500’s 16.3% year-to-date return is outperforming the regular, capitalization-weighted benchmark—which pundits decry as “top heavy.”^[iv] While the S&P 500’s top-10 constituents—all Tech or Tech-like (save one big bank)—make up a hefty 37.5% of the index and have collectively done well this year, the “average” S&P 500 company is doing better.^[v]

Then too, small-cap stocks are beating large. The Russell 2000, a small-cap index, is up 24.1% year to date, beating the Nasdaq 100—the epitome of Big Tech—which is up 19.2%.^[vi]

Next, look outside America. This banger bull market is fully global. The MSCI World Ex. USA Index’s 14.7% year-to-date rise edges out the S&P 500’s 14.0%.^[vii] Even the MSCI Emerging Markets (EM) Index is outrunning America with its 23.3% year-to-date ascent.^[viii]

All told, 12 of 22 non-US developed markets are beating the S&P 500. In alphabetical order they are: Australia (14.6% year to date), Austria (27.5%), Belgium (14.2%), Canada (15.8%), Italy (18.2%), Japan (22.8%), the Netherlands (38.3%), New Zealand (15.3%), Norway (29.5%), Portugal (17.7%), Singapore (26.8%) and Spain (17.3%).^[ix]

Sectors within the MSCI World Ex. USA Index are also outperforming. Besides non-US Tech—yes, there is some Tech outside America—which rose 37.6% year to date (outperforming US Tech), Energy (32.9%), Materials (16.1%), Industrials (15.6%) and Financials (21.0%) also outclassed the American benchmark.^[x] One reason to look beyond your backyard when hunting investment opportunities.

What is driving such widespread gains globally? A wall of worry, like every bull market. Energy and Norway leading global stocks may not shock—although that is mostly old news. Oil prices’ jump earlier this year juiced profits, sending shares skyward. That said, with the apex of oil prices likely behind us, we think the outlook is less rosy for Energy looking forward. The Netherlands’ topping the developed markets leaderboard isn’t too surprising, either. It is a narrow market and home to a global semiconductor equipment juggernaut—amid a worldwide chip shortage.

But elsewhere? Markets are rising as fears prove false. For example, the highest 10-year Japanese government bond (JGB) yields in three decades—and record-high 30-year JGB rates—have global investors on edge. But as Exhibit 1 shows, that hasn’t stopped Japanese stocks, nor has the generationally weak yen. Meanwhile, global stocks in general are rising (as we described) through a developed market rate ruckus, too.

Exhibit 1: Record High Japanese Stocks Despite Rising Rates

Source: FactSet, as of 8/17/2026.

Or take Canada, which many fret faces 50% American tariffs among other (false) scares. Yet Exhibit 2 shows its exports in US dollars approaching record levels—similar to Norway’s—revealing reality is better than feared there as well, underscoring Canadian stocks’ outperformance.^[xi]

Exhibit 2: Record High Canadian Exports Despite Tariffs

Source: FactSet, as of 8/17/2026.

In Australia, many feared its “tightening” monetary policy tied to three rate hikes this year. Yet the country’s huge Materials sector and its smaller Energy sector are powering gains. But even here, consumer-related stocks are up nicely and Financials are up 11.7%.^[xii] Rate hikes for the wrong reasons aren’t positive to us, but they also don’t carry the bite many presume—Australian stocks’ ascent proves it.

So far this year then, we see a bull market stronger and broader than many appreciate. While sentiment is warming—especially in America—enough worries linger globally to leave bricks in the wall for this bull market to keep running.