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Foreign Stocks Outshine S&P 500 in 2026
28 Aug
Summary
- International stocks continue to outperform the S&P 500 in 2026.
- A weak U.S. dollar is supporting the ongoing rally in foreign equities.
- Valuation gaps and sector diversification drive overseas investment.

U.S. investors embraced international stocks in 2024 and 2025, a strategic shift that has paid off handsomely. By 2026, large-cap international stocks are outperforming the S&P 500, with flows into international indexes showing no signs of slowing. This rally is supported by a significant valuation gap compared to U.S. markets, healthy earnings growth abroad, and strategic sector diversification.
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