U.S. vs International/U.S. Sectors

by | Jul 10, 2025 | Market Commentary, Market Performance

Performance Source: Koyfin.com Price Return

U.S. Versus International

The S&P 500 Index, an index of large U.S. companies, posted a price return of 10.6% for the Second Quarter of 2025. This move brought the index around to an all-time high to end the quarter. Large U.S. stocks underperformed international for the quarter as measured by the iShares MSCI ACWI ex-US Index, a representation of international stocks outside the U.S. The International ETF return for the Second Quarter of 2025 was 11.5%.

International stocks outperformed U.S. stocks for the second quarter in a row. The two biggest factors driving international returns include price-to- earning ratio expansion and currency effects. Investors have been seeking out stocks with relatively lower prices. On January 1, 2025, the Europzone Price to Earnings(P/E) Ratio was 12.9x versus the U.S. multiple of 21.5x.  The current Eurozone P/E Ratio according to J.P. Morgan is 14.3x.

The U.S. Dollar has been falling versus major international currencies year-to-date. When the value of the U.S. Dollar falls, shares in International stocks that are priced in the U.S. Dollar are inherently worth more. 

 

U.S. Sectors

Top performing U.S. S&P 500 sectors as reported by Koyfin for the Second Quarter of 2025 include Technology (22.8%), Industrials (12.9%) and Communications (12.8%). Laggards for the Second Quarter include Energy (-8.5%), Health Care (-7.2%) and Consumer Staples (-0.2%).

Stocks that can benefit from growth took center stage again in the second quarter. A backdown in tariff activity helped revalue stocks up to their pre-tariff talk levels. Technology stocks, in particular, led the rally once again. Industrials and Communications stocks stand to benefit from greater expansion.

Energy, Health Care and Consumer stocks were leading performers in the first quarter. The second quarter brought a swift reversal of those gains. These stocks are typically more defensive in nature and have steady performance regardless of economic conditions.