Broadening beyond the US giants

During the last quarter of 2025, stocks rose due to continued optimism around artificial intelligence (AI), expectations for interest rate cuts, and strong earnings. Investors have been wondering whether and when equity markets will sustainably broaden beyond US large-cap growth stocks. There are signs of this occurring: during Q4 2025, emerging markets, Europe, Japan and US large‑cap value and small‑ and mid‑caps outperformed US large-cap growth stocks. The market’s appetite for risk also kept changing, and concerns over AI spending also contributed to this broadening. T. Rowe Price outlines...