U.S. Stocks Edge Ahead of International Shares as AI Rally Builds
U.S. stocks have moved ahead of international shares after a stretch of overseas outperformance. The Vanguard Total Stock Market ETF is up 14.6% year to date…
U.S. stocks have retaken the lead over international shares, with the Vanguard Total Stock Market ETF up 14.6% year to date and the Vanguard Total International Stock ETF up 13.2%. The reversal follows a stretch in which overseas markets almost continuously outperformed for a year and three quarters.
The gap is narrow for now. But it marks a change in direction after international stocks nearly doubled the U.S. fund’s return in 2025, when VXUS gained 32.4% against VTI’s 17.1%.
U.S. shares have drawn support from the artificial-intelligence boom. Nvidia, Microsoft, Meta and Apple have traded at or near record highs in recent sessions, while chip and infrastructure companies Intel, Micron and AMD have added to market gains, according to the Yahoo Finance report.
The shift matters to investors weighing whether to hold a broad mix of U.S. and overseas shares. Recent performance has again favored the U.S., but the source cautions that the latest reversal does not establish that American stocks will keep leading. International shares could still recover and finish the year ahead.
AI demand reshapes the comparison
International markets had held the advantage for much of this year, at one point outperforming by as much as 10 percentage points in February. The latest year-to-date figures show that lead has since turned into a modest U.S. advantage.
The performance contrast also follows a long period when U.S. equities dominated. From VXUS’s inception in January 2011 through the end of 2024, VTI rose 466%, compared with 82% for VXUS. That record had led some investors to question the value of international diversification, while the overseas fund’s strong showing in 2025 renewed hopes of a longer period of leadership.
Market leadership has shifted in cycles, the report says. International stocks led for much of the 2000s, before U.S. shares took over for most of the following decade and a half. The latest change therefore does not, by itself, settle which market will lead next.
Artificial intelligence is a major tailwind for U.S. corporate earnings and the domestic market, according to the source. Some international markets, including Japan, South Korea and Taiwan, have also benefited because of their roles in the chip supply chain. Many other overseas markets have not shared those gains.
That uneven exposure creates a challenge for broad international funds while AI remains the dominant market theme: they include markets that have benefited from the technology boom and others that have not. The next performance updates will show whether U.S. stocks extend their lead or international shares regain ground.
Source: finance.yahoo.com
