America Remains the Most Important Market

Felix Wintle

Fund Manager

There has been a lot written about the end of American Exceptionalism in recent months, but when we look at what has actually happened on the geopolitical stage and in markets, the opposite is surely true. If anything, America has become more dominant on the world stage and continues to be the most important market for equity investors.

The idea that American Exceptionalism is over seems to have quickly become a consensus view amongst investors. This view gained popularity earlier this year when three things happened at the same time: 1) Trump’s tariff policy, 2) volatility in the US Treasury market and the US Dollar and 3) outperformance of Europe over the US. This made it seem that, perhaps, a new era was underway.

Fast forward to today and the picture is very different. Trump’s negotiating efforts have been very successful from an American point of view. Trade deals with several countries have been agreed and the numbers are impressive. The UAE and Saudi Arabia have committed to over $2tr of investment in the US across aerospace, defence energy and technology sectors. Japan and the EU have also committed to over $1tr in investments into the US economy. And tariff agreements come on top of these numbers and there are more deals to come. You might ask, how has he managed to conjure up such huge levels of investment when there was nothing in place beforehand? President Trump has realised that the US has leverage, and he has used it; the very definition of exceptionalism.

In terms of markets, the concern around US Treasuries has completed faded away. In fact, the 10 year bond yield, below, has been in a trading range and has not broken out as feared.

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The US dollar has been weak, but this has had the effect of easing monetary conditions and boosting risk appetite. As for equities and the relative underperformance, this also looks like it is to be short lived, as the S&P 500 and the Nasdaq are back to all-time highs. Even the Russell 2000 index, which is a barometer for the mid and small caps and has been a real laggard, is at a 6-month high, at the time of writing.

America is home to companies that dominate in the most important investment themes of today: AI, defence, power demand, digital assets to name a few. It is also home to the deepest pools of capital and the risk seeking attitude of the world’s largest investors. It’s for these reasons that America retains its exceptionalism and why we are so bullish about the companies we own in the VT Tyndall North American Fund.

13th August 2025
Read time : 3 mins

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Data source: Bloomberg

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America Remains the Most Important Market

Felix Wintle

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