It’s been happening for quite some time, but U.S. markets have been outperforming global markets.
Some traders have even described it as a sort of “great decoupling.”
For years, many indices in U.S. markets like the S&P 500 have consistently outperformed prominent international names like the MSCI World and MSCI ACWI. In 2026 alone, annualized returns for the S&P 500 have often exceeded global benchmarks by several percentage points. Some analysts even expect the S&P to outperform indices like MSCI Europe and Japan’s TOPIX by 2-3.5X this year.
With such a consistent performance, it makes some traders wonder what kinds of structural advantages U.S. markets have, compared to the rest of the world.
Scott Bauer shed some light on this topic with Jeff Praissman when he appeared on the IBKR Podcast earlier this week. Scott discussed two key reasons why U.S. markets are outperforming global markets:
- Energy independence
- AI leadership
Scott discussed some of the advantages these two reasons offer, how they’re driving this divergence among U.S. markets, and if this outperformance can continue amid rising geopolitical risks.
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Scott covers:
- Why he thinks these trends can continue
- The “AI bubble,” and why it’s currently on the backburner
- Whether there’s too much capital expenditure for AI
- If AI expenditures can hold up once we get beyond the current Middle East conflict
- How guidance from big tech companies could determine if U.S. markets remain on top of the chain
