US Stocks Underperform Global Markets by Widest Margin in 32 Years as Consumer Fears Mount

Financial alarm bells are ringing as American assets stumble through their worst global comparison in decades. The MSCI USA index plummeted 11% in 2025’s first 16 weeks, while the MSCI all-world ex-US benchmark climbed 4% in dollar terms — creating the widest performance gap since 1993 when trade liberalization drove investor enthusiasm away from domestic stocks. This sharp reversal comes as President Trump’s tariff policies spark recession concerns and economic turbulence among Americans.

• The University of Michigan’s Consumer Sentiment Index hit a record low at 52.2 in April among Democrats and Independents, with inflation expectations rising to 6.5% — the highest since 1981.
• Google searches for “Global Financial Crisis” are set to reach levels unseen since 2010, while “Great Recession” queries are forecast to hit their highest rate since the pandemic began.

Echoes of the past: Trump’s trade policies have sparked what Deutsche Bank’s head of emerging markets research, Sameer Goel, calls “a repricing of US assets due to increased policy uncertainty and the stagflationary shock from tariffs.” This policy approach has simultaneously weakened the dollar by 8% this year against major currencies, further widening the performance gap between US and international markets. Meanwhile, Americans are swapping financial survival tips online — from budget cooking videos to recession-era life hacks — as they brace for potential economic hardship reminiscent of 2008. Social media platforms have become virtual town squares where millennials, who weathered the Great Recession as young adults, now share their hard-earned wisdom with younger generations facing their first major economic downturn.