Investing Ideas

Why an international equity rotation could continue

Five important factors supporting this potential opportunity—especially for Europe.

By: Yasmin Landy Faris Rahman
Updated: 5/27/2025
Key Takeaways
  • Global investor sentiment has shifted toward international developed markets outside the U.S. and Canada.
  • A weaker trend for the U.S. dollar relative to other currencies may support continued investment flows toward international developed markets.
  • If market leadership from a small group of large cap growth companies within the S&P 500 index were to change, investors may seek a broader set of opportunities in international markets over the longer term.
  • A wave of fiscal stimulus may also support growth trends for European markets.
  • Developed-market international equities—especially in Europe—may have more room to run before they reach their long-term valuation level relative to the S&P 500 index.
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