US stocks operate on a different fiscal year cycle from S&P/ASX 200 Index (ASX: XJO) shares.
However, as so many of us are invested in both markets, it's relevant to compare their performance over a given period.
So, let's canvas what happened in the Australian financial year (FY26) from 1 July 2025 to 30 June 2026.
Image source: Getty Images
Let's compare…
S&P/ASX 200 Index (ASX: XJO) shares increased 2.77% and delivered total returns, including dividends, of 7% in FY26.
The S&P/ASX All Ords Index (ASX: XAO) rose 2.43% and provided total returns of 5.69%, according to S&P Global data.
By comparison, the S&P 500 Index (SP: INX) rose by 20.86% and delivered total returns of 22.32%.
The Nasdaq Composite Index (NASDAQ: .IXIC) ascended 28.69% and gave a total return of 30.55%.
The Dow Jones Industrial Average (DJX: .DJI) rose 18.65% and delivered a total return of 20.65%.
Why did US stocks outperform ASX 200 shares?
Drew Meredith from Wattle Partners says it comes down to America's leading position in the artificial intelligence (AI) revolution.
In an article in The Golden Times, Meredith explained:
The United States market is being driven by a small number of companies with outsized earnings power, almost all tied to artificial intelligence infrastructure.
Nvidia, Microsoft, Alphabet, Meta, and Amazon have delivered earnings growth that justifies, at least in part, the premium valuations US indices now carry.
Meanwhile, ASX 200 shares struggled to grow in FY26 amid resurgent inflation, three interest rate hikes in February, March, and May (reversing the impact of one cut in August), the energy crisis, and weak consumer confidence.
On top of that, fears of an AI bubble and a SaaSpocalypse weighed on our tech sector, which dove 37% in FY26.
ASX 200 healthcare shares also tumbled 37% amid many industry challenges, including a weaker US currency impacting global players.
Meredith says the Federal Budget's CGT reform package, announced in May, has also weighed on financial shares and property, too.
Can the US markets keep delivering?
Shaun Manuell, Chief Investment Officer (CIO) at AustralianSuper, isn't ready to call the top of the US stock market yet.
In the Weekend Australian, Manuell described US equities being in the "rational exuberance phase".
He said:
The retail investor is back in the US, and I think there's a lot of weight behind that.
When the US equity market gets going it's a very, very powerful engine. So, I wouldn't be calling the top of that just yet.
As for ASX 200 shares, Manuell is not optimistic for FY27.
It'll be another challenging year; you're going to have to be really careful in the sectors.
We know consumer sentiment's down, house prices are down, and that leads through to the wealth effect as well.
Manuell said AusSuper is "slightly overweight" US stocks, and underweight ASX shares compared to global stocks.
He likes ASX 200 mining shares but is underweight bank stocks.
Should you buy US stocks?
Meredith warns against 'recency bias' and any temptation investors may feel to switch out of ASX 200 shares in order to buy US stocks.
Meredith explains:
When one market dramatically outperforms another for two or three years, investors feel they were wrong to be diversified. That feeling is not evidence. It is recency bias.
The periods of sharpest US outperformance relative to global peers have consistently been followed by periods of mean reversion.
This happened after the dot-com peak in 2000. It happened in the early years after the GFC when US banks were recovering and Australian miners were printing money.
It does not happen on a schedule you can predict, which is precisely why systematic diversification matters more than tactical shifts.
Manuell says his team is eyeing off a recent pullback in the Magnificent Seven US stocks as a potential buying opportunity.
He also said he is more comfortable investing in the "picks and shovels" of the AI revolution, commenting:
Everyone's been playing the picks and shovels because they can see there's money to be made but this is just making the infrastructure.
Once we've got the infrastructure, what's going to happen? Nobody knows…
3-year snapshot of ASX 200 shares vs. US stocks
| Total returns | FY24 | FY25 | FY26 |
| ASX 200 | 11.44% | 13.81% | 7% |
| ASX All Ords | 11.44% | 13.23% | 5.69% |
| S&P 500 | 25.02% | 15.16% | 22.32% |
