Wall Street had a perfectly fine year in 2025. The Vanguard S&P 500 ETF (VOO) climbed 15% through mid-December, and tech stocks kept doing their thing, rallying nearly 30% thanks to the ongoing AI bonanza. The Technology Select Sector SPDR Fund (XLK), which tracks the tech-heavy portion of the S&P 500, continued benefiting from enthusiasm around artificial intelligence, cloud infrastructure, and semiconductor demand.

But here's the thing: if you'd looked beyond American shores, you would have made out like an absolute bandit.

International markets delivered the kind of returns that make 15% look downright modest. We're talking double, triple, even quadruple the S&P 500's performance in some cases. And yet, as Helen Jewell, chief investment officer at BlackRock, put it: "International outperformance was an underappreciated story of 2025."

Underappreciated might be the understatement of the year.

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South Korea and Peru absolutely dominated global equity returns, each posting gains north of 80% year to date. Korean stocks rode a powerful wave of semiconductor earnings recovery and strengthening export momentum. Peru's market, meanwhile, got a huge lift from surging metals prices.

Southern Europe put on an unexpectedly impressive show. Spanish and Greek equities soared more than 75%, while Italy racked up a 54% gain. Poland and Austria weren't far behind, climbing 73% and nearly 70% respectively.

The commodity-driven economies delivered equally eye-popping numbers. South Africa, Colombia, Chile, and Brazil all posted returns well above 45%, powered by rising commodity prices, stabilizing currencies, and improving earnings outlooks for mining and energy companies.

Even markets that faced trade uncertainty managed to crush U.S. benchmarks. Vietnam, Mexico, and Canada each more than doubled the S&P 500's gains, benefiting as tariff-related concerns eased throughout the year.

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What This Means for 2026

The obvious question: was this a one-time catch-up trade, or is there more room to run?

J.P. Morgan Asset Management thinks investors should pay attention. Their latest Investment Outlook advises investors to "ensure their portfolios are not overly concentrated in U.S. tech, even if the U.S. rally could successfully extend into 2026."

Karen Ward, market strategist at J.P. Morgan Asset Management, believes the next phase of global equity performance will favor markets where actual earnings growth and reasonable valuations drive returns, rather than narrative momentum and hype.

European equities still look attractively priced compared to U.S. stocks and other asset classes. China, despite rocketing nearly 80% from its early-2024 lows, could continue grinding higher at a more moderate pace as earnings recover and valuations expand.

Markets like South Korea, Taiwan, and Hong Kong have historically performed well during Federal Reserve rate-cutting cycles. Their cyclical exposure and concentration in long-duration sectors including technology, capital goods, and healthcare tend to benefit when rates decline.

Japanese equities also present an interesting opportunity, though Ward cautions that yen volatility could affect total returns for U.S. dollar-based investors.

The firm emphasizes that "regional diversification does not just mitigate risk; it can also be return-enhancing," particularly if the fervor around U.S. artificial intelligence themes starts to fade.

In other words, the world is bigger than the Magnificent Seven. And in 2025, it paid handsomely to remember that.