American hot money piling into some foreign markets produced gigantic gains in 2025 (Spain +49%).

By Wolf Richter for WOLF STREET.

The S&P 500 Index soared by 16.4% in 2025. Since the Liberation Day bloodletting bottom on April 8, it soared by 38%. Over the past three years of 2023-2025, it soared by 79%. Since the March 2020 low, the index soared by 208%, despite two sell-offs in between. These are huge gains.

In March 2020, the Fed unleashed its mega-massive QE program, to outdo all prior QE programs, and cut short-term interest rates to near zero, and kept doing it even as inflation was beginning to rage in 2021 and heading toward 9% before they finally hiked rates and unwound part of the QE assets they’d purchased.

After the Dotcom bubble, which began to implode in March 2000, the S&P 500 spent 13 years in stock-market hell on a rollercoaster to nowhere with two 50%-crashes in between. But money-printing starting in 2009 fixed that. In May 2013, the S&P 500 surpassed its March 2000 high in a sustained manner. Today, it’s up by 351% from the March 2000 high (index data via YCharts).

American hot money gushes into overseas markets.

As big as the gain was for the S&P 500 Index in 2025, it got beaten by a number of major stock markets around the world as American money gushed into them and pushed some to crypto-like gains.

Canada’s TSX Composite Index in CAD and USD:

The TSX soared by 28.2% in 2025, to 31,713, after having already soared by 18% in 2024.

Since the April 8 low, it has exploded by 41%! US tariffs may be bad for Canada but good for Canadian stocks?  Whatever. More likely, American hot money.

Since the March 2008 high, it has risen by 111% (all stock-index and currency data below via Investing.com).

The TSX is denominated in Canadian dollars, which finally rose against the USD in 2025. So expressed in USD, as investors in the US would see it, the TSX did even better in 2025, soaring by 35.5% for the year, and by 47% since the April 8 low. These were huge gains for US-based investors.

But the prior years were tough. Since 2011, the CAD has zigzagged lower from over 1 USD per CAD, to 69 US cents per CAD in early 2025.

So the gain of 111% from the March 2008 high shrivels, when expressed in USD, to a gain of just 54%.

And for US-based investors, there were no gains between 2007 and early 2021, just zig-zagging up and down for 14 years.

The chart shows the TSX index expressed in USD since 2005 (each day’s TSX value is adjusted by the exchange rate at the time):

Japan’s Nikkei 225 in YEN and USD:

The Nikkei 225 index soared by 26% in 2025, to 50,339, after having already gained 19% in 2024, when it edged past the 1989 Bubble high, and 28% in 2023.

In the 36 years since the Bubble peak in December 1989, the Nikkei 225 has risen by 29%. It was a wild ride down to 2012, and a wild ride up to 2025.

Since January 2012, the Nikkei 225 has soared by 500%, from 8,390 to 50,339, as the Bank of Japan was going hog-wild with QE, that included equity ETFs and ended up putting over half of Japan’s gigantic government debt on the BOJ’s balance sheet, and triggering substantial inflation that it is now trying to contain.

The BOJ started shedding its bond holdings in 2024 and announced recently that it would very very very very slowly sell its equity ETF shares, as part of its accelerated QT program.

But the yen has plunged against the USD since 2012, when the BOJ set out to knock it down with its policies.

It now takes ¥157 to buy $1. Back in January 2012, it took ¥77 to buy $1. In other words, since 2012, the yen has collapsed by 50% against the USD. A substantial portion of that collapse took place in the three years of 2022-2024.

For USD-based investors in Japanese stocks, that 500% gain of the Nikkei 225 in yen since January 2012 shriveled to a still substantial gain of 184% in USD.

The chart shows the Nikkei 225 index expressed in USD (each Nikkei 225 value is adjusted by the exchange rate at the time):

China’s Shanghai Stock Exchange:

The Shanghai Stock Exchange index [SSE] rose by 18.4% in 2025, after the 12.6% gain in 2024, and losses in 2023 and 2022.

China’s stocks experienced two bubbles that both collapsed. The all-time high was reached 18 years ago, in October 2007; and currently, at 3,969, the SSE is down 35% from the peak 18 years ago and back where it had first been in May 2007.

Hong Kong’s Hang Seng Index:

The Hang Seng Index [HSI] soared by 27.8% in 2025, to 25,630, after having already soared by 21% in 2024.

The index is still down by 23% from the all-time high in January 2018 and by 16% from the 2007 high, and is back where it had first been in September 2007.

A very rough 18-year roller-coaster to nowhere.

India’s BSE Sensex Index.

The BSE Sensex Index rose by 9.1% to 85,220 in 2025, which left it a hair below the peak in September 2024, with a sell-off in between.

Since 2010, the index has soared by 388%. But over the same period, the Indian rupee has plunged by 51% against the USD.

So, for USD-based investors in Indian stocks, that 388% gain in rupees of the BSE Sensex since January 2012 shriveled to a still strong 147% gain in USD terms.

Today’s level in dollars is where it had first been in June 2024.

The chart shows the Sensex expressed in USD since 2010 (each Sensex value is adjusted by the exchange rate at the time).

Spain’s IBEX 35 Index.

The IBEX 35 exploded by 49% in 2025, to 17,307 after having already surged by 14.8% in 2024, for a two-year gain of 71%! And for a three-year gain of 110%! Hot patootie!

In late October, the IBEX 35 blew past the prior all-time high of December 2007 and ended the year 9% higher than the 2007 high.

European stocks became a huge favorite for US investors, and when this American hot money piles into a foreign market, it jolts that market, especially a smaller market like that of Spain.

Italy’s FTSE MIB Index

The FTSE MIB soared by 31.5% in 2025, to 44,945, after having risen by 12.3% in 2024. Since October 2022, the index has more than doubled. Since 2012, it has tripled.

But it was still not enough to break the March 2000 bubble high, and today it’s where it had first been in January 2000.

UK’s FTSE 100 Index.

The FTSE 100 soared by 21.5% to 9,931 in 2025, after the 5.7% gain in 2024.

In the quarter century since the beginning of 2000, the index has risen by 43%.

Germany’s DAX Price Index [DAXK].

The most widely cited German stock market index, the DAX, is a “total return index” that includes dividends and is therefore not comparable to a “price index,” such as the S&P 500 Index, and all the other indices here, which do not include dividends.

But the DAX Kursindex [DAXK] is a “price index” that does not include dividends and is therefore comparable to the S&P 500 Index and all the other indices here.

The DAXK soared 20% in 2025 to 9,175, after having already soared by 16.5% in 2024.

Over the quarter century since the March 2000 high, the index has risen by 33%.

France’s CAC 40 Index.

The CAC 40 rose by 10.4% in 2025, to 8,149 where it had first been in April 2024. But it had declined in 2024.

Over the quarter century since September 2000, the index has risen by 18%.

But since the ECB’s huge money-printing binge began in 2011, the CAC 40 nearly tripled. The miracles of money printing. The ECB kicked off QT in late 2022 and has since then shed 51% of its QE assets (bonds and loans).

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WOLF STREET FEATURE: Daily Market Insights by Chris Vermeulen, Chief Investment Officer, TheTechnicalTraders.com.