The U.S. stock market is underperforming the rest of the world this year but that doesn’t mean American exceptionalism is dead, according to Apollo Global CEO Marc Rowan. The S & P 500 is a little more than 4% higher in 2025, underperforming other overseas markets that have surged this year as investors diversifed away from the U.S. The iShares MSCI ACWI ex US exchange-traded fund (ACWX) has rallied almost 17% year to date. Individual stock exchanges have performed even better. German stocks have soared more than 30% this year. China stocks are up more than 18%. But the U.S. is far from unattractive, Rowan said. Even with continued risks ranging from a ballooning fiscal deficit to geopolitical uncertainty, the U.S. stock market will continue to remain compelling to institutional investors, as it has for the last 15 years, the investor said. That’s owing to the strength of the tech sector. “We were, as I sometimes say, hyper exceptional,” Rowan told Morningstar CEO Kunal Kapoor on stage at the Morningstar Investment Conference in Chicago. “Ten stocks became 40% of the S & P, those 10 stocks were at a 60 P/E at one point. And one stock, Nvidia, that was greater than the market cap of every stock exchange other than Japan. That is hyper exceptional.” “We are now moving to merely exceptional,” Rowan added. “And so, on the margin, money will now flow to Europe and China, because the U.S. has made itself, on the margin, less attractive. That does not mean less attractive to Europe and China.” .SPX YTD mountain S & P 500, year to date Indeed, on Thursday, the S & P 500 was on the cusp of an all-time high, less than 1% below its February peak, after clawing back all its losses following the tariff-induced April selloff. Tech stocks have led the way. Information technology and communication services are the top two S & P 500 sectors this quarter, rallying 21% and 15%, respectively. Within that universe, semiconductors have outperformed, with the VanEck Semiconductor ETF (SMH) up more than 30% over that time. Nvidia is up more than 40%. “You look at the world, the world has three big investment blocks. You can invest in China, you can invest in Europe. You can invest here,” Rowan said. “I would rather be here.” “We are just the cleanest dirty shirt,” he said. “Every problem we have is worse in the other two regimes.”
