The S&P 500 has delivered its most significant quarterly underperformance relative to global equities in 37 years, tumbling 5.8% in March alone. This marked its most challenging month since December 2023 and its first consecutive monthly declines since the autumn of last year.
The U.S. benchmark’s lag behind the MSCI All Country World Excluding United States Index reached an intensity not seen since 1988. The technology sector, a significant component of the U.S. market, has particularly faltered, with the iShares Semiconductor ETF witnessing an 11.9% plunge in March. The Nasdaq 100, heavily skewed toward technology, slipped 1.1%, buffeted by the underperformance of semiconductor stocks.
Compounding the sector’s woes, Tesla saw its shares dive 36% in the first quarter of 2025, marking its most severe quarterly decline since 2022 and the third-worst on record.
In stark contrast, major global stock markets—excluding New Zealand, Taiwan, Turkey, Indonesia, and Thailand—delivered stronger performances, outshining Wall Street in the initial quarter of the year. This divergence in performance underscores the troubles faced by U.S. equities amid challenges within the tech sector.
Thailand saw its ETF performance down 13% against S&P 500 in the first quarter of this year, the worst among the list. The Southeast Asia second’s largest economy faced several headwinds in the beginning of the year with lower-than-expected Chinese arrivals, lack of investors confidence, economic slowdown, trade war and earthquake.
Meanwhile, Poland ranked at the top of outperformers with a gain of 42.6% against the U.S. stocks. Greece, Spain, Austria and Italy followed. Even China was ranked at 8th among the outperformers from its tech rally since January.
Earlier, Goldman Sachs has reduced its S&P 500 target for the second time this month, highlighting increased recession risks and uncertainties surrounding tariffs.
Led by strategist David Kostin, the team now anticipates the benchmark index to close the year at approximately 5,700 points, a significant drop from their prior estimate of 6,200. This new projection suggests a modest 2% gain from the S&P 500’s closing on Friday and is one of the most conservative forecasts on Wall Street, according to Bloomberg data.
Kostin noted in his report that the combination of slowing economic growth and escalating uncertainty justifies a heightened equity risk premium and reduced valuation multiples. If the growth prospect and investor confidence continue its downward trend, valuations could plunge well below the forecast, he cautioned.
This recent revision follows an earlier target cut from 6,500 on March 11, influenced by the downward trajectory of technology stocks this year.
