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The US dominates global stock markets – but will it last?

Economic growth far outstrips that of the second-largest market but threats to the US's crown may come from further afield
April 23, 2024
  • The UK used to have the world’s biggest stock market – but fortunes can reverse
  • Can fast-growing emerging economies knock the US off the top spot?

US stocks now account for 60 per cent of the FTSE All-World index, with the American market roughly 10 times the size of its closest rival, Japan. Soberingly, US dominance is so assured that the market capitalisation of Microsoft alone is almost the same as the entire UK market. 

But it wasn’t always like this. At the turn of the 20th century, the UK market dominated, with US market capitalisation far closer to French or German levels, as the chart below shows. Over the proceeding 125 years, strong economic performance, large IPO volumes and substantial returns saw the US stock market soar. Analysts at UBS think that “no other market can rival this long-term accomplishment” – and nor are rivals likely to do so in the near future.

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