The S&P 500 index has delivered average annual returns of about 14 per cent since 2010, outstripping all other major national benchmarks. That performance was bolstered by gains of more than 20 per cent in both 2023 and 2024, as excitement about AI pushed US-listed megacap technology stocks, such as chipmaker Nvidia, to record highs.

The start of 2025 has brought a rare bout of Wall Street underperformance, as relatively unloved European markets play catch-up.

The Magnificent Seven group of giant technology stocks — Apple, Alphabet, Amazon, Meta, Microsoft, Nvidia and Tesla — hold almost a third of the S&P 500’s $51.8tn market value, while the index’s cyclically adjusted price-to-earnings ratio, a measure of valuation, is approaching its highest level since the early 2000s.

“Periods come and go where bubbles start to form. And we are in a bubble today in the US, and a bubble in the tech world,” said Sløk.