Chart time frame of 2009-2025 tracks US exceptionalism and outperformance since the end of the Global Financial Crisis in 2009. Chart is for illustrative purposes only. Past performance is no guarantee of future results..
U.S. equities, as captured by the S&P 500 Index, have had a challenging first half of the year, underperforming global indices such as the STOXX Europe 600 and MSCI World Index. A primary cause of this underperformance has been higher policy uncertainty and concerns about the impact of higher tariffs on growth
While policy uncertainty can impact short-term volatility and lead to temporary underperformance, what does this mean for returns over the long term? An important driver of long-term returns has historically been earnings and profit margins, where the U.S. has typically continued to outperform. In fact, since 2010 margins increased 6.4% to 13.5% as compared to a 2.7% increase in Europe to 10.1%. i The difference between U.S. and European margins is now 3.4%, near the highest in history.ii
Additionally, technology leadership and increased adoption of artificial intelligence (AI) across diverse industries will likely support the continued expansion of U.S. margins, allowing them to surpass the rest of the world. Considering the many ways AI may potentially improve profit margins for businesses, we anticipate that 2025 S&P 500 earnings per share will come in at $260-$270, demonstrating positive growth of roughly 8% as strong earnings and margin expansion continue to drive U.S. exceptionalism into the future.
i FactSet 6/20/2025
ii FactSet 6/20/2025
The S&P 500 Index tracks the 500 largest publicly traded companies representing about 80% of U.S. market capitalization. STOXX Europe 600 is a pan-European index covering 600 large- mid- and small-cap companies across 17 European countries. MSCI World Index is a global equity index that tracks large- and mid-cap stocks across 23 developed markets. Investors cannot invest directly into any index.
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