The S&P 500, which is chock full of multi-nationals whose revenues are (my guesstimate) half from abroad, is up by about 8%, year to date. The Russell 2000, a much stronger indicator of the vigor of the domestic economy, in my view, is up also, but only by about 2%.

Over the same time period, the dollar has fallen by around 13% against the euro and the Swiss franc. It’s even off, by a bit less than 7%, against the Japanese yen, an economy that has been on the economic ropes for over three decades.

In contrast, the EAFE (Europe Asia and the Far East) index of non-US markets has risen by 20%+ in dollars so far in 2025. A reasonable guess–or at least my guess–is that this breaks out into half local currency stock price gain/half currency gain against the $US.

If the dominant world stock market stories of the 1980s were the flowering of the domestic Japanese economy and Deng’s “socialism with Chinese characteristics, and during the 1990s the promise of the EU, the overwhelming narrative of the 21st century, so far, has been the technology revolution led by US companies. So this sharp reversal is particularly striking. …less so for investors narrowly focused on the US, however, than for those with a global view, since dollar weakness has disguised the full extent of the US market decline.

I find it significant that the US stock nose dive began after the inauguration rather than after the election. I think this indicates that concerns are not about Trump’s past or the policies he outlined during his campaign.

Instead, it seems to me that investor worries center on whether the US will be able to achieve any real GDP growth given a shrinking workforce and an anti-education vibe; and whether the combination of trickle down economics and cuts to government services will be enough to ensure repayment of government borrowings.

My sense is that investors see the caterers removing the remains of the food and drink, and the band packing up its instruments, but no one wants to head for the door because it’s been such a great party–and for so long–and it’s not clear where to go next.