Dollar weakens but US stocks soar

Why are US stocks going up while the dollar is going down?

- WILSON SY

Why are US stocks going up while the dollar is going down?

US equity markets hit fresh record highs last week. This defied the dollar's worst performance since 1973, as corporate America's AI dominance and lack of global alternatives overshadowed currency weakness. The stunning rebound has seen the Nasdaq surge by 39 percent from April lows and the S&P 500 climb by 29 percent. Both indices are now solidly positive for the year, with the Nasdaq up by 6.6 percent year-to-date and the S&P gaining 6.4 percent. The dollar has plummeted by 9.8 percent year-to-date in this historic decline.

'Sell America' trade hits dollar hard

Earlier this year, we highlighted emerging cracks in US exceptionalism and how the "Sell America" trade hit the US dollar, as some foreign entities pulled back from buying US Treasuries. This strategy has gradually caught on among global investors seeking to diversify away from dollar assets. Trump's "big, beautiful" tax bill and rising US debt have accelerated this concern. Meanwhile, US stock markets reached new highs because the leading US companies remain unparalleled. Corporate America remains exceptional and significantly ahead of others.

Dimon confirms American corporate dominance

This US corporate superiority is exactly what JPMorgan Chase CEO Jamie Dimon highlighted in his warning about Europe's declining competitiveness. "Europe has gone from 90 percent of US GDP to 65 percent over 10 or 15 years. That's not good," Dimon said at an Irish foreign ministry event in Dublin.