HSBC's report highlights a robust start for Emerging Markets (EM) in 2026, with the MSCI EM index rising approximately 11% in USD terms. This performance contrasts with a mere 2% increase for the MSCI US index. The report attributes this outperformance to improvements in regional structural stories and company fundamentals, alongside a decline in the US Dollar.

Emerging Markets outperforming US stocks

"Overall, EMs are proving again in 2026 that they can be both lucky and good, with the tailwind of dollar weakness acting as a catalyst for attractive structural stories and improving fundamentals and profits."

"Amid further signs that global investors have cooled towards dollar assets – with the dollar itself falling sharply last week – the EM momentum trend is accelerating."

"Some EM specialists point to structural reforms and the prospect of lower rates providing relief to the fiscal outlook as positives."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)