For more than a decade, U.S. stocks have led the way. However, in 2025, the tone began to shift. A few numbers tell the story: At the end of 2024, U.S. stocks were priced about 54% higher than their global counterparts. By mid-April, that gap had narrowed to 42%. That shift may reflect growing questions about whether U.S. dominance will continue at the same pace.

What risks come from concentrated exposure to U.S. tech?

Tech has been the engine of U.S. stock performance over the last several years, and much of the market’s gains have come from a handful of prominent tech names. Seven companies now make up nearly a third of the S&P 500. Their strong run has brought more ups and downs along with it. From 2020 to 2024, these stocks experienced average annual swings that were twice as large as those of the broader index.

That kind of concentration means portfolios that look diversified on the surface may be more exposed to specific company risks than expected. There are no guarantees that these tech companies will maintain their dominance amid a rapidly evolving technology sector, with new artificial intelligence breakthroughs emerging almost every month.

Will international stocks outperform the U.S. over the next decade?

Since 1970, U.S. and global markets have traded turns in leading performance. The current U.S. run, which began after the Global Financial Crisis, has been unusually long. That doesn’t mean it’s over, but it’s worth remembering that outperformance tends to rotate over time.

Historically, the U.S. has outpaced global peers thanks to faster economic growth, more profitable companies and higher investor confidence. But keeping that lead would require those advantages to hold, and that may be harder with policy uncertainty, waning consumer optimism and increased geopolitical risks in play.

J.P. Morgan Asset Management’s Long-Term Capital Market Assumptions suggest developed international stocks may produce better annual returns than U.S. equities over the next 10 to 15 years. The expected difference is about 1.4% annually – specifically, 8.1% for EAFE stocks (Europe, Australasia, Far East) versus 6.7% for U.S. stocks. While these numbers aren’t predictions, they’re helpful data points based on assumptions about earnings, valuations, currency shifts and dividends.

How much of your portfolio should be in non‑U.S. stocks?

Heavy allocations to U.S. stocks, especially in passive index formats, often come with more exposure to a few dominant firms than investors realize. Adding global holdings can help smooth performance across different economic conditions, innovation winners, interest rate paths and policy environments. That doesn’t mean turning away from U.S. markets; it simply means building in more flexibility in case leadership shifts or volatility continues.

Many investors assume “going global” means shifting half or more of their equity investments overseas. But that’s not how the market is structured today. The MSCI World Index, a common benchmark for global stocks, is still about 70% U.S. Adding just a 30% allocation to non-U.S. developed markets brings more diversification than it did a decade ago, when the U.S. and international split was closer to even.

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The U.S. stock market remains a major driver of global returns, but expectations are changing. Investors appear less willing to pay steep premiums, and long-term projections favor a more balanced approach. International diversification is not about betting against the U.S. It’s about reducing dependence on a single region or group of companies. In times of uncertainty, that kind of balance can help portfolios stay on track.

Reach out to your J.P. Morgan advisor to learn more about how to better position your portfolio for potential global market shifts.

IMPORTANT INFORMATION

Volatility measures the extent to which returns vary over time. Volatility is calculated using the standard deviation of returns and shown as a rolling 3 or 5 Year annualized standard deviation.

The S&P 500 Index is an unmanaged broad-based index that is used as representation of the U.S. stock market. It includes 500 widely held common stocks. Total return figures reflect the reinvestment of dividends. “S&P500” is a trademark of Standard and Poor’s Corporation.

The MSCI World Index is a free float-adjusted market capitalization index that is designed to measure global developed market equity performance.

The price of equity securities may rise or fall due to the changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Equity securities are subject to "stock market risk" meaning that stock prices in general may decline over short or extended periods of time.​

Past performance is no guarantee of future results. It is not possible to invest directly in an index.​

Given the complex risk-reward trade-offs involved, we advise clients to rely on judgment as well as quantitative optimization approaches in setting strategic allocations. Please note that all information shown is based on qualitative analysis. Exclusive reliance on the above is not advised. This information is not intended as a recommendation to invest in any particular asset class or strategy or as a promise of future performance. Note that these asset class and strategy assumptions are passive only – they do not consider the impact of active management. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Assumptions, opinions and estimates are provided for illustrative purposes only. They should not be relied upon as recommendations to buy or sell securities. Forecasts of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material has been prepared for information purposes only and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. The outputs of the assumptions are provided for illustration/discussion purposes only and are subject to significant limitations.

“Expected” or “alpha” return estimates are subject to uncertainty and error. For example, changes in the historical data from which it is estimated will result in different implications for asset class returns. Expected returns for each asset class are conditional on an economic scenario; actual returns in the event the scenario comes to pass could be higher or lower, as they have been in the past, so an investor should not expect to achieve returns similar to the outputs shown herein. References to future returns for either asset allocation strategies or asset classes are not promises of actual returns a client portfolio may achieve. Because of the inherent limitations of all models, potential investors should not rely exclusively on the model when making a decision. The model cannot account for the impact that economic, market, and other factors may have on the implementation and ongoing management of an actual investment portfolio. Unlike actual portfolio outcomes, the model outcomes do not reflect actual trading, liquidity constraints, fees, expenses, taxes and other factors that could impact the future returns. The model assumptions are passive only – they do not consider the impact of active management. A manager’s ability to achieve similar outcomes is subject to risk factors over which the manager may have no or limited control.

The views contained herein are not to be taken as advice or a recommendation to buy or sell any investment in any jurisdiction, nor is it a commitment from J.P. Morgan Asset Management or any of its subsidiaries to participate in any of the transactions mentioned herein. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit and accounting implications and determine, together with their own financial professional, if any investment mentioned herein is believed to be appropriate to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yield are not a reliable indicator of current and future results. 

This material is for informational purposes only, and may inform you of certain products and services offered by J.P. Morgan’s wealth management businesses, part of JPMorgan Chase & Co. (“JPM”). Products and services described, as well as associated fees, charges and interest rates, are subject to change in accordance with the applicable account agreements and may differ among geographic locations. Not all products and services are offered at all locations. If you are a person with a disability and need additional support accessing this material, please contact your J.P. Morgan team or email us at accessibility.support@jpmorgan.com for assistance. Please read all Important Information.