In 2025, US stocks had a stellar year, but global markets overall outperformed them in growth.

The MSCI All Country World ex-USA index, which tracks stocks outside the United States, gained 29.2% in 2025, while the S&P 500 rose 16.39%.

Rising interest in artificial intelligence fueled demand on Asian platforms: tech companies and chipmakers benefited from growing demand. In Europe, markets supported government plans for defense spending and expectations of improved economic growth.

A weaker U.S. dollar provided an additional momentum to international equities. When the dollar weakens, investments in foreign currencies become more attractive after converting back into dollars.

The U.S. Dollar Index, which measures the dollar’s strength against six major currencies, fell about 9.4% in 2025 – the worst reading since 2017.

At the outset of 2025, valuations of American assets were fairly expensive relative to other regions, prompting investors to seek profits across various markets.

“In 2025, a lot went well for international stocks,”

– Michael Reynolds

Asia’s Market Growth and the AI Impact

Asian platforms continued to flourish thanks to AI-related trading activity.

The tech sector and chipmakers in South Korea, Taiwan, Japan, and China benefited from heightened AI demand.

Each country showcased its leadership: Kospi in South Korea rose nearly 76% in 2025 – the best showing in 26 years; Japan’s Nikkei 225 added about 26% on the strength of tech companies and chipmakers.

In Japan, shares of memory maker Kioxia surged more than five hundred percent, and Samsung in South Korea jumped almost 130%.

“AI-powered trading has expanded significantly over the past year. This optimism is increasingly priced in outside the U.S., reaching Korea and Japan,” noted Arun Sai, Senior Multi-Asset Strategist at Pictet Asset Management.

Taiwan’s Taiwan Semiconductor Manufacturing Company (TSMC) rose 46.54% in 2025 and hit new records. Meanwhile Alibaba (BABA) in China added about 75.81% after the introduction of AI and the launch of its own chatbot.

“AI-powered investing trading has expanded substantially over the past year. This optimism is increasingly reflected outside the United States, spanning global markets, including Korea and Japan,”

– Arun Sai

Europe: Defense Spending and Improving Outlooks

By the end of spring 2025, European stock markets felt the impact of Germany’s defense-spending reforms, fueling gains for defense companies; Rheinmetall rose about 154%.

Forecasts for the economies of Greece, Spain, and Poland improved, and the banking sector, notably Santander and Deutsche Bank, also showed strong results – about 126% growth for each.

The IBEX 35 in Spain rose 49%, delivering the best annual performance since 1993. Italy’s FTSE MIB added almost 32%, Germany’s DAX about 23%, Greece’s ATHEX Composite 44%, each with its best annual performance for the corresponding periods. Poland’s WIG rose 47%.

“In a period when a weaker dollar was pushing investors toward global exposure, Poland offered an attractive combination of growth and value,” said David Russell, Global Head of Market Strategy at TradeStation.

The FTSE 100 in the United Kingdom reached a 21.51% gain – the best result since 2009. Soon the index moved into 2026 with renewed momentum, climbing above 10,000 points.

The Dollar and Investors’ Outlook

For American investors, the dollar will remain the key to assessing the profitability of foreign assets.

“If the dollar continues to weaken, overseas stocks will continue to have the edge for investors,”

– Michael Reynolds

While international markets outpaced the U.S. in 2025, many analysts highlight solid fundamentals supporting the American market.

“We still prefer the U.S. as first, and international markets as second,”

– Samir Samana

Diversifying portfolios and expecting the dollar to stabilize remains important. At the same time, experts anticipate continued growth driven by innovations in artificial intelligence, supporting corporate profitability across the globe.

“One of the biggest and least expected surprises of 2025 was the extraordinary outperformance of developing markets’ stocks,”

– Lisa Shalet