Why International Stocks Could Massively Outperform U.S. Equities in 2026

The article warns that while the S&P 500 (US SP 500) has rebounded recently, structural and geopolitical shifts could tilt returns toward international equities in 2026 and beyond. It cites the U.S.–Iran conflict and new trade realignments as a drag on U.S. trade exposure, and IMF downgrades to U.S. GDP growth. It also highlights that AI-driven gains favor manufacturing-heavy economies, which could help foreign, production-oriented markets outperform U.S. service-led equities for years. The author recommends keeping U.S. exposure (e.g., SPY) but strategically adding international ETFs such as SCHF or VXUS to capture potential upside and reduce concentration risk.