US Stocks Lag Global Markets by Most Since 1995 as S&P 500 Slides

U.S. stocks posted their worst start relative to global markets since 1995, according to Goldman Sachs. As of mid-February 2026, the S&P 500 declined 1% year-to-date, while the MSCI ACWI ex-USA (ACWX) index rose 8%. International indices returned 30% over the past year, triple the 10% gain for U.S. equities. Analysts attribute the divergence to domestic geopolitical risks, including tariff policies, and elevated valuations. U.S. equities trade at a 40% premium to global peers, with the top 10 holdings comprising 40% of the S&P 500. Capital flows indicate a reversal, with net cross-border M&A outflows from the U.S. in 2025 and foreign ownership stagnating for four years.