A global order long anchored by Washington across trade, economics and security is undergoing visible strain, with policy shifts under U.S. President Donald Trump prompting allies to rethink their strategic positioning. According to a recent Reuters analysis, financial markets are increasingly responding to what investors see as a fragmentation of U.S.-led economic leadership and the emergence of a more multipolar framework.
Reuters reported that investors are interpreting this shift as an opportunity rather than simply a risk. Signs of more proactive policymaking outside the United States, including fresh trade negotiations and coordinated fiscal responses, are encouraging greater exposure to non-U.S. equity markets, energy stocks and currencies such as the euro and Canadian dollar. Strategists told Reuters that this is less about abandoning U.S. assets and more about broadening portfolios to reflect changing global dynamics.
Canada’s Prime Minister Mark Carney struck a similar note in a January address in Davos, where he suggested that “middle powers” could work together to avoid being disadvantaged by American dominance. Reuters highlighted those remarks as emblematic of a wider mood among advanced economies seeking strategic autonomy. At the same time, European policymakers are preparing further steps to enhance the euro’s international role, with discussions expected around the Munich Security Conference.
Market data cited by the news agency suggests that earnings momentum outside the United States is strengthening. Of the companies in Europe’s STOXX 600 that have reported quarterly results so far, more than 70% have beaten expectations, a rate higher than average. London’s FTSE 100 recently crossed the 10,000 milestone for the first time and has outperformed the S&P 500 this year, Reuters noted, reflecting investor appetite for internationally diversified revenue streams.
Investment products are being structured around these themes. Reuters reported that BNP Paribas’ European Strategic Autonomy fund, launched last year, focuses on defence, industrial resilience, resource independence and technology — sectors aligned with Europe’s long-term investment plans. However, analysts cautioned that U.S. trade relationships remain deeply embedded in global supply chains and will not be easily replaced. Trade agreements between the European Union and partners such as India or the Mercosur bloc may diversify ties over time, but their economic impact will take years to fully materialise.
Geopolitical tensions have reinforced the push for self-reliance. Reuters noted that the COVID-19 crisis, Russia’s war in Ukraine and shifting U.S. tariff policies exposed vulnerabilities in global supply chains. More recently, renewed U.S. rhetoric regarding Greenland has further underscored strategic frictions.
Defence stocks in Europe have surged since early 2022, a trend linked to increased fiscal commitments and discussions about joint EU funding mechanisms. Britain is also considering participation in a potential multi-billion-euro European defence initiative. Energy production is another theme gaining traction. Broader sovereignty efforts may extend beyond defence and energy.
Currency strategists are also watching the shift closely. Thierry Wizman of Macquarie Group told Reuters that the Canadian dollar, Japanese yen and euro could benefit if deregulation, fiscal expansion and pro-growth reforms gather momentum outside the United States.
Investors are not forecasting a collapse of U.S. influence but rather adapting to a world in which economic and geopolitical leadership is more distributed. As middle powers forge partnerships aligned with their own strategic priorities, capital flows appear increasingly willing to follow, reshaping global markets in the process.
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