Global Markets Surge Past S&P 500: Peter Oppenheimer's Vision for the Next Decade

The U.S. stock market is facing an unprecedented challenge. Through early 2026, the S&P 500 has climbed just under 1%, while the MSCI ACWI ex U.S. Index—a benchmark tracking global stocks outside America—has surged 10%. This represents the widest performance gap since 1995, according to Kevin Gordon, head of macro research at Charles Schwab. The divergence highlights a fundamental shift in how investors are positioning their portfolios amid shifting economic dynamics.

Peter Oppenheimer, a senior economist at Goldman Sachs, has emerged as a key voice in explaining this trend. Rather than viewing it as a temporary market anomaly, Oppenheimer and his Goldman Sachs research team have issued comprehensive forecasts suggesting the divergence will likely persist—and perhaps intensify—over the coming decade.

Goldman Sachs’ Long-Term Growth Forecasts: A Call for Global Diversification

Peter Oppenheimer’s analysis paints a striking picture. Goldman Sachs economists estimate the S&P 500 will compound at 6.5% annually over the next 10 years. That’s respectable by historical standards, but it pales compared to their projections for other markets:

• Europe: 7.5% annually
• Japan: 12% annually
• Asia (excluding Japan): 12.6% annually
• Emerging Markets: 12.8% annually

These forecasts, led by Peter Oppenheimer’s team, suggest that a concentrated U.S. portfolio could significantly underperform over the next decade. Emerging markets alone—according to this analysis—could deliver nearly double the annualized returns of the S&P 500, compounding the opportunity cost of an American-only allocation.

What’s Driving the Global Outperformance?

Several structural factors explain why international equities are becoming increasingly attractive relative to U.S. stocks.

Valuation Disparities: The MSCI ACWI ex U.S. Index trades at a forward price-to-earnings multiple approximately 32% below the S&P 500. While the U.S. has historically commanded a valuation premium, the current gap is nearly twice the historical average, according to JPMorgan Chase analysts. This suggests international stocks offer better value relative to earnings potential.

Currency Dynamics: The U.S. Dollar Index has weakened 10% since Trump took office in January 2025. A depreciating dollar amplifies returns for U.S. investors holding foreign assets, as foreign currency gains are converted back to stronger-dollar terms. Economic concerns—including broad tariffs, rising federal debt, and scrutiny of Federal Reserve policies—typically weaken currency valuations, creating a tailwind for international investment returns.

Performance Since 2025: Since January 2025, international stocks have advanced 40% while the S&P 500 gained 15%—a 25 percentage point gap that is unprecedented in recent market history. This dramatic outperformance extends beyond developed markets; emerging markets have been particularly strong beneficiaries.

Exploring Emerging Market Opportunities: ETF Options

For investors interested in capturing emerging market upside identified by Peter Oppenheimer and other strategists, two primary index funds offer straightforward exposure:

Vanguard FTSE Emerging Markets ETF (VWO):

• Expense ratio: 0.06% (highly efficient)
• Primary holdings: China, Taiwan, India, Brazil, with exposure to major semiconductor manufacturers
• Past year return: 30%

iShares MSCI Emerging Markets ETF (EEM):

• Expense ratio: 0.72% (significantly higher)
• Primary holdings: China, Taiwan, India, Brazil, plus substantial South Korean exposure
• Past year return: 42%

The iShares fund has outperformed over the past year, primarily due to holdings in Samsung and SK Hynix—the world’s largest memory chip manufacturers. Strong demand for memory chips, driven by artificial intelligence infrastructure expansion, has powered these stocks higher.

However, over five-year periods, both funds have delivered comparable returns because Vanguard’s lower expense ratio effectively compensates for iShares’ higher-performing individual positions. For patient, long-term investors, either fund represents a viable pathway to emerging market diversification.

A Balanced Perspective on Global Allocation

While Peter Oppenheimer’s Goldman Sachs forecasts suggest compelling returns ahead for non-U.S. markets, most investors should maintain a substantial allocation to U.S. equities and S&P 500 index funds. The United States remains the global leader in technological innovation—a factor that historically drives long-term economic growth and stock market returns.

A prudent approach combines conviction in global diversification with recognition that American technological leadership continues to generate significant long-term value. Emerging markets may deliver higher returns over the next decade, but broad geographic diversification reduces concentration risk and allows investors to benefit from opportunities across multiple regions and innovation ecosystems.

The divergence between U.S. and global stocks may persist, but the solution is not complete abandonment of American equities. Instead, as Peter Oppenheimer’s research suggests, it points toward a more thoughtfully calibrated global portfolio that captures opportunities wherever they emerge.