The Week in Review: May 26, 2025

US Exceptionalism

Discussions of U.S. exceptionalism in the stock market stem from the consistent outperformance of major U.S. indexes compared to global markets. For example, over the past decade, the Global Dow is up about 103%, while the S&P 500 Index has risen by 180%, according to S&P Global (excluding reinvested dividends, April 30, 2015 – May 22, 2025).

Since the start of the year, overseas markets have outperformed, as evidenced by the Global Dow.

A brief phase of market outperformance doesn’t automatically signal the decline of U.S. exceptionalism, as some have opined. In truth, measuring US exceptionalism solely through stock market performance is too narrow a perspective.

So, let’s provide a working definition. US, or American, exceptionalism is the belief that the nation’s history, values, and political system set it apart, suggesting that the US has a unique role to fulfill on the global stage.

America's institutions play a key role in shaping and reinforcing the idea of American exceptionalism. These structures contribute to the nation's stability, global influence, and unique identity. These include:

  • Three equal branches of government prevent authoritarian rule and reinforce democracy.

  • The rule of law protects individual and property rights, supporting economic stability.

  • The deepest and most transparent capital markets in the world attract capital from overseas.

  • Strong institutions, including an independent Federal Reserve, reinforce economic strength.

  • The world’s largest economy influences global trade, finance, and innovation, supporting the nation’s leadership role.

  • The US is home to many top universities, fostering intellectual leadership, technological advancements, and global influence in research and education.

  • The US dollar is the world’s reserve currency, and most commodities, including oil, are priced and traded in dollars (with few exceptions).

Last week, the Wall Street Journal noted that privately owned tech firms in the US valued at more than $1 billion have an estimated combined market value of $2.5 trillion, significantly surpassing China ($703 billion) and Europe ($333 billion).

Domestic innovation, according to LPL Research, “continues to rise to new heights as the US has long been a leader in technological advancements, thanks to substantial investments in research and development, a robust higher education system, and a dynamic entrepreneurial ecosystem.”

Yet, short-term stock market performance is shaped by a range of factors. While the possibility of market corrections and bear markets remains a consideration, the unique strengths of the US economy continue to attract foreign investment and reinforce confidence in American markets.

Despite inevitable challenges, this has placed the US in an enviable position.

Market Summary

Please do not hesitate to contact me with any questions or concerns. 

I hope you have a great week!

Bill Stordahl, CFP®
Managing Director
Stordahl Capital Management

Stordahl Capital Management, Inc is a Registered Investment Adviser. This commentary is solely for informational purposes and reflects the personal opinions, viewpoints, and analyses of Stordahl Capital Management, Inc. and should not be regarded as a description of advisory services or performance returns of any SCM Clients. The views reflected in the commentary are subject to change at any time without notice. Nothing in this piece constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Advisory services are only offered to clients or prospective clients where Stordahl Capital Management and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Stordahl Capital Management unless a client service agreement is in place. Stordahl Capital Management, Inc provides links for your convenience to websites produced by other providers or industry-related material. Accessing websites through links directs you away from our website. Stordahl Capital Management is not responsible for errors or omissions in the material on third-party websites and does not necessarily approve of or endorse the information provided. Users who gain access to third-party websites may be subject to the copyright and other restrictions on use imposed by those providers and assume responsibility and risk from the use of those websites. Please note that trading instructions through email, fax, or voicemail will not be taken. Your identity and timely retrieval of instructions cannot be guaranteed. Stordahl Capital Management, Inc. manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.

1. The Dow Jones Industrials Average is an unmanaged index of 30 major companies which cannot be invested into directly. Past performance does not guarantee future results.
2. The NASDAQ Composite is an unmanaged index of companies which cannot be invested into directly. Past performance does not guarantee future results.
3. The S&P 500 Index is an unmanaged index of 500 larger companies which cannot be invested into directly. Past performance does not guarantee future results.
4. The Global Dow is an unmanaged index composed of stocks of 150 top companies. It cannot be invested into directly. Past performance does not guarantee future results.
5. CME Group front-month contract; Prices can and do vary; past performance does not guarantee future results.
6. CME Group continuous contract; Prices can and do vary; past performance does not guarantee future results.

Stordahl Capital Management