The simple reason why the U.S. stock market is outperforming the world 🫰

TKer Stock Market Truth No. 5 reminds us that earnings drive prices 📜

U.S. stocks have benefitted from impressive earnings growth. (Source: BlackRock)

Non-U.S. stocks have been lagging U.S. stocks for years.

And it’s for a simple reason: earnings.

“U.S. equities have outperformed the rest of the world, fueled by robust corporate earnings,“ BlackRock analysts said in their 2025 outlook report published on Wednesday.

This divergence in the markets is illustrated nicely in the charts above, which show price performance on the left and earnings growth on the right. In both charts, U.S. stocks (red line) smoke stocks from the rest of the world (yellow line).

As TKer Stock Market Truth No. 5 reminds us, earnings drive stock prices. It doesn’t matter where you are in the world. The principle holds across time and distance.

But is the U.S. premium getting stretched?