Good morning investors. A big question friends and family keep asking me is whether it’s time to buy the dip in stocks. Today’s edition turns the question on Wall Street. First time reading? Join 190,000 self-directed investors gaining an edge every morning. Sign up here. 

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US vs. world

The America-first White House doesn’t seem bothered by a last-place stock market. 

It didn’t take long for US stocks to fall from global favorites to laggards. Just weeks into 2025, the S&P 500 has ceded its leadership to international indexes and no one in Washington has blinked.

Investors, for now, aren’t sure if they should either. 

President Trump has not only shrugged off speculation over a so-called “Trump Put” — the expectation for him to support falling stocks — but reiterated Tuesday that he’s not watching asset prices.  

Traders didn’t take that as reassurance. The S&P 500 fell 0.76% and the Nasdaq Composite dipped 0.28% on the day. 

But one day doesn’t tell the story. After a blistering 2024, US equities now find themselves on the wrong side of a global trade, underperforming their peers by the largest margin in years.

Opening Bell Daily shared an earlier version of the chart below on Monday, and two days later the disparity is even more pronounced.

Currently, the MSCI US index currently trades at 21 times forward earnings, while the MSCI All-Country World ex-US index hovers at a more modest 14 times.

That valuation gap implies the latter has room to run, according to strategists at Yardeni Research. 

“The international catch-up trade has a very high ceiling,” the team told clients early Wednesday.

Tariffs, of course, are the driving force behind this shift. Investors are still assessing the impact of on-again, off-again trade policies. 

That said, not every strategist is convinced it's time to stop betting on America. 

JPMorgan’s David Lebovitz, for one, told clients that the S&P 500’s recent weakness could be a buying opportunity if it dips below 5,500. 

“We’re certainly not running for the hills,” Lebovitz wrote in a note.

Meanwhile, SoFi’s head of investment strategy Liz Young Thomas said the recent sell-off has been driven more by sentiment than fundamentals. 

The same tech and financial stocks that dominated 2024 have been the biggest losers of the last month, she explained, which is further evidence of a “sentiment-driven flush.” 

“The S&P 500 is 9% off its all time high, yet price targets haven’t budged and now imply index upside of 18%,” Thomas wrote on X. “If fundamentals remain strong and keep price targets steady, this type of move has historically been good for forward returns.”

Market snapshot:

Elsewhere:

📊 Stocks climbed overnight ahead of the inflation report. Each of the three US benchmarks ticked higher in anticipation of the February CPI report, which is projected to rise 2.9% year-over-year, according to FactSet. If that holds it would be cooler than the 3.0% seen in January. (FactSet)

🏦 Trump said he won’t raise tariffs on Canadian steel imports. The president initially said Tuesday that he would hike the 25% levy to 50% the following day, but six hours later he reversed that decision, according to White House advisor Peter Navarro. (CNBC)

🎓️Job openings climbed in January. The JOLTS survey showed postings rose to 7.74 million on the month, up 232,000 from December and just above forecasts. The data kept the ratio of job openings to available workers around 1.1. Most of those gains came from retail and finance. (CNBC)

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About me:

📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

I write our flagship newsletter to prepare you for each trading day, unpacking markets, economic data and Wall Street with analysis you won’t find anywhere else. Feedback? Reply directly to this email, ping me on X @philrosenn, or write me phil@openingbellmedia.com.