Pro-growth policies in Europe and Asia have supported developed international markets, despite tough U.S. tariff talk.

Key takeaways:

• President Trump's "America First" policies have been key drivers of global equity markets so far in 2025, sending U.S. and international stocks in opposite directions.
• While tariff talk has weighed on U.S. stocks, international stocks in developed markets have enjoyed their best start to a year in a quarter century, supported by pro-growth policy shifts.
• Expectations for greater defense spending in Europe is giving the region’s industrials sector a particularly big boost, fueled by double-digit early gains in aerospace and defense stocks.