Buy the US market downturn? These strategists are looking abroad.

Subscribe to enjoy similar stories. As the U.S. market downturn continues, the natural question is whether it is a good time to start buying.

Some strategists suggest investors willing to do that should look abroad. The Nasdaq Composite is down 13% and the S&P 500 has fallen 9% since mid-February. Strategists are weighing whether this could be the first cracks in the “U.S.

exceptionalism" trade that drove stocks to new highs not long ago. “Is this correction once again offering investors an opportunity to buy high-quality U.S. growth names?" wrote Louis Gave, head of Gavekal Research, in a note to clients on Tuesday.

“Probably not. The idea that the U.S. is the only place where global investors can deploy capital is now being challenged by new policy and market trends," That is partly because uncertainty over on-again, off-again tariffs, fiscal policy, and the country’s debt is hitting a well owned and not exactly cheap U.S.

market. But it is also because of an emerging contrast. Both China and countries in Europe are bolstering spending, which makes their prospects for growth prospects look, at least, less bad, as the U.S.

tries to cut back. Treasury Secretary Scott Bessent described it as a “detox" from excessive dependence on government outlays. The iShares Europe exchange-traded fund is up nearly 13% so far this year and the iShares MSCI China ETF is up 16%.

The S&P 500 is down 4%. Chinese stocks have been shaken out of a rut, in part because the Chinese upstart DeepSeek’s AI models have forced a reassessment about whether the U.S. is the only game in town in terms of artificial intelligence.