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#USStocks have been eclipsed by market gains in the rest of the world in 2025, as worries about high valuations, a Chinese artificial intelligence breakthrough and #DonaldTrum ’s radical economic policies contributed to a rare year of underperformance for Wall Street.

The S&P 500 was up 17.4 per cent this year when US markets closed on Monday, undershooting the 29 per cent gain for the MSCI All Country World ex-US index by the widest margin since the global financial crisis in 2009.

Wall Street’s AI boom has powered a rebound from the sell-off sparked by Trump’s “liberation day” #Tariffs blitz in April.

But the lingering effects of the president’s trade war — as well as anxieties over sky-high US tech valuations — have led many investors to question the dominant position in global portfolios long enjoyed by US stocks.

#AsianStocks markets have been among the strongest performers, buoyed in part by Chinese start-up DeepSeek, which raised the prospect of serious competition to US AI with its large language model breakthrough in January.

The MSCI China is up 29 per cent, while Hong Kong’s Hang Seng has climbed almost 28 per cent.

US chipmaker Nvidia dropped 17 per cent on a single day following the release of a DeepSeek model whose performance rivalled those of US competitors but at a lower cost, prompting investors to question whether vast investment in AI infrastructure was necessary.

Although Nvidia stormed back to become the world’s first $5tn company in October, nagging doubts about AI valuations have hit the US market, fuelling a sharp November sell-off.

US President #DonaldTrump lashed out in unusually personal terms against the six #SupremeCourt justices who handed him one of the biggest setbacks of his second term in office by striking down the administration's global #Tariffs .
The court's Friday ruling was "deeply disappointing". The justices who joined the majority opinion should be "absolutely ashamed" and lacked the courage to "do the right thing", Trump said, turning his response into a sweeping attack against a co-equal branch of government.
The broadside was remarkable even for a president known for blowing past political norms and publicly berating those who challenge his authority.
"I'm ashamed of certain members of the court. Absolutely ashamed for not having the courage to do what's right for our country," $TRUMP said at the start of a press conference at the White House, which was held a few hours after the decision was released.
Trump did not mince words from there as he assessed the decision, which held that presidents do not have inherent authority to impose sweeping tariffs on any country.
For the next 45 minutes, Trump criticised the ruling and made the case that he would find other methods to continue imposing tariffs on other countries. But throughout he repeatedly returned to the justices in ways that made clear he felt personally slighted by the decision.
The president did not discriminate against Republican and #Democratic appointees, either.
The six justices who struck down Trump's tariffs were equally divided among the court's liberal and conservative wings. Three - Justices ElenaKagan, Sonia Sotomayor and Ketanji Brown Jackson - were appointed by Democratic presidents. The other three were appointed by Republicans. ChiefJustice John Roberts is a George W Bush pick who wrote the majority opinion, and Justices Neil Gorsuch and Amy Coney Barrett were appointed by #trump in his first term in office.

Top court issues historic rebuke of US president’s use of emergency powers to impose duties on #tranding partners

Donald Trump has vowed to impose a 10 per cent “Global #TARIFF ” using an alternative law after the Supreme Court ruled that his sweeping duties are illegal.
#USStocks close higher after Supreme Court ruling on Trump tariffs
US markets edged higher as investors weighed the Supreme Court’s ruling that Donald Trump’s sweeping tariffs was illegal and his vows to find “alternatives” to the levies.
#TrumpTariffs live Trump vows to impose 10% global tariff after Supreme Court rules sweeping duties are illegal
Top court issues historic rebuke of US president’s use of emergency powers to impose duties on trading partners
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Trump vows to impose 10% global tariff after Supreme Court rules sweeping duties are illegal
Donald Trump has vowed to impose a 10 per cent “global tariff” using an alternative law after the Supreme Court ruled that his sweeping duties are illegal.
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US stocks close higher after Supreme Court ruling on Trump tariffs
US markets edged higher as investors weighed the Supreme Court’s ruling that Donald Trump’s sweeping tariffs was illegal and his vows to find “alternatives” to the levies.
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Trump has lost his favourite margin for manoeuvre
Do not underestimate the scale of the Supreme Court’s blow to Donald Trump. Like a Roman emperor, he has been doling out tariffs with the crook of his finger. One day Switzerland is at 39 per cent; the next, following the gift of a gold ingot and carriage clock, it falls to 15 per cent. Should a foreign leader displease him, as India’s Narendra Modi did when he refused to endorse Trump’s bid for a Nobel Peace Prize, the rate doubled to 50 per cent. In China’s case, the president bowed before its stronger firepower and reduced them from a high of 145 per cent to about 45 per cent.

Vance labels court ruling as ‘lawlessness . . . plain and simple’
Vice-president JD Vance criticised the Supreme Court on Friday afternoon, describing its tariffs ruling as “lawlessness . . . plain and simple”.
Tariff reimbursements will take years, analysts warn
Tariff reimbursements could take years to be completed, analysts have warned, as companies line up to claw back funds paid under Donald Trump’s tariff regime.
Court decision has little effect on markets
Market reaction was restrained after the Supreme Court decision. The dollar index is still a touch weaker, down 0.1 per cent for the session. Thirty-year US Treasury yields are up just 0.02 percentage points at 4.73 per cent.
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#investors ip in a volatile sell-off of perceived #AI losers”, choosing instead to stand on the sidelines until the full scale of the economic disruption becomes clearer.

The launch of a number of new AI tools in recent days has threatened to disrupt traditional business models in sectors including trucking, real estate, wealth management and advertising, with violent share price moves highlighting a market wracked with nerves about what comes next.

Despite companies rushing to reassure investors that AI will enhance their business and that plunging share prices are an overreaction, many portfolio managers are resisting the temptation to buy the dips that emerge.

“The world is changing very, very quickly . . . we wouldn’t have the conviction to try and bottom-fish,” s
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Investors reluctant to ‘buy the dip’ after AI scares
Sectors including wealth management and trucking have been hit with sudden share price declines

Some of the biggest software stocks have sold off significantly in recent weeks Michael Nagle/Bloomberg
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Emily Herbert in London

PublishedFEB 16 2026
Investors are shying away from buying the dip in a volatile sell-off of perceived “AI losers”, choosing instead to stand on the sidelines until the full scale of the #Economic disruption becomes clearer.

The launch of a number of new AI tools in recent days has threatened to disrupt traditional business models in sectors including trucking, real estate, wealth management and advertising, with violent share price moves highlighting a market wracked with nerves about what comes next.

Despite companies rushing to reassure investors that AI will enhance their business and that plunging share prices are an overreaction, many portfolio managers are resisting the temptation to buy the dips that emerge.

“The #world is changing very, very quickly . . . we wouldn’t have the conviction to try and bottom-fish,” said Robert Schramm-Fuchs, portfolio manager at Janus Henderson. 

“The AI models today are substantially more powerful than the ones from six or 12 months ago. What seems protected as a business model today might not be [in the future],” Schramm-Fuchs added. “It makes it even harder to buy the dip.” 

The Nasdaq Composite gave up 2.1 per cent this week and the broader S&P 500 shed 1.4 per cent. But the relatively measured index-level declines mask far more violent moves beneath the surface, with trucking giant CH Robinson falling 12 per cent and investment firm Charles Schwab down 11 per cent. Commercial real estate firm CBRE dropped 16 per cent and insurance broker Gallagher declined 13 per cent this week.

While billions of dollars were wiped from market caps, newly slashed valuations and share prices have largely failed to recover in subsequent sessions.

“Hesitation” had characterised markets this week, said Valérie Noël, head of trading at Syz Bank. “There’s been very little willingness to defend sharp moves the way you’d normally expect,” she said, and the market was “prioritising uncertainty management over dip-buying”.

While some of the biggest software stocks have sold off significantly in recent weeks, most investors are so far continuing to sell the sector rather than choosing to buy the dip, according to custodial markets data from State Street, which the firm uses to provide a snapshot of investor appetite.

“We see no sign of institutional investors trying to buy the dip in the [software] sector,” said Marija Veitmane, head of equities strategy at State Street, adding that money was instead going to the hardware end of the tech sector.

Goldman Sachs last week launched a new pair trade combining long positions on software “that AI cannot realistically displace because they require physical execution, regulatory entrenchment . . . or human accountability” with short bets against “software-tilted workflows that AI could increasingly automate or rebuild internally”.

“We expect [the former] to recover from the recent software sell-off while [the latter] lags behind,” the bank’s equity strategists said in a note on Thursday.

The logistics sector plunged in erratic trading on Thursday, when an announcement by a little-known $3mn karaoke-turned-freight company in Florida triggered one of the worst ever sell-offs for the trucking sector, wiping billions of dollars from the value of some of the industry’s most established names.

The tiny company at the heart of that sell-off — once the Singing Machine Co, now Algorhythm Holdings — released a white paper on Thursday that said its AI platform could scale freight volumes by up to 400 per cent without a corresponding increase in headcount.

The note ignited fears that new technology would destroy the market value of some of the industry’s leaders, sending logistics companies CH Robinson and Landstar both down by about 15 per cent in a single day.

Wealth management giants suffered similar moves earlier in the week, when AI tax planning firm Altruist released a suite of tools — sending FTSE 100 wealth manager St James’s Place 13 per cent lower — with insurance names similarly hit by a model from AI start-up Insurify. 

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For some fund managers, however, the size of the stock falls looks like an overreaction.

“There is a lot of irrationality in markets at the moment,” said Alex Wright, a portfolio manager at Fidelity International. Wright said he had picked up some bargains in the recent sell-off because “a lot of stocks are not being priced appropriately”.

But others remain reluctant to jump back in.

“I think the [software] sell-off is totally logical,” said Charles Lemonides, the founder of hedge fund ValueWorks. “Valuations were absurd coming into this. Companies that were trading at 50 times earnings have come down to 30 times earnings because they will be hit by some AI disruption.”

Dan Hanbury, a portfolio manager at fund firm Ninety One, said that a lot of “great companies” had been swept up in the recent sell-offs.

“[But] I think the disruption is real, and you have to be very careful,” he added. “AI is going to get a lot more powerful — how can I guarantee that the moats around these companies are still going to be here? I’m not trying to trade that bounce.”