S&P 500 Outperforms Global Peers Amid Trade Tensions

The S&P 500 is reclaiming its dominance over global markets after a sluggish start to 2025. July has marked a sharp reversal, with the US index now outpacing major international ETFs tied to Europe, emerging markets, and ex-US equities. This shift comes despite escalating trade tensions under President Donald Trump, who cited Wall Street's record highs as validation for his tariff policies.

While US markets rally, foreign assets face mounting pressure. Brazil and Canada have borne the brunt of recent trade actions, with the iShares MSCI Brazil ETF (EWZ) plunging 4.6% in July following a 50% tariff on Brazilian imports. The iShares MSCI Canada ETF (EWC) shows similar weakness as retaliatory measures take effect. UBS Global Wealth Management notes TRUMP appears "emboldened to escalate trade actions" after recent political victories.