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US Stock Market Claims 45% of Global Cap as Nvidia’s Valuation Surpasses GDP of Most Countries

Published April 3, 2024 5:14 PM
Shraddha Sharma
Published April 3, 2024 5:14 PM

Key Takeaways

  • The US stock market now represents approximately 45% of the global market cap.
  • American stocks exceed the market sizes of several major economies combined.
  • Nvidia’s valuation outstrips the GDP of nearly every country as AI valuations have pulled the stock market.

The US stock market accounts for about 45% of the total global market capitalization, as per analysis by The Kobeissi Letter. The report reveals that the US market has surged almost 15% since the Great Financial Crisis of 2008. As the US equity market surpasses the combined market sizes of India, China, Australia, and several other countries, how has AI contributed to its growth?

US Market’s Global Standing

The New York Stock Exchange (NYSE) and NASDAQ are the leading stock exchange operators globally. According to Statista, the US’s stock market share stood  at around 60% as of January 2023, dwarfing other countries, with Japan and the United Kingdom trailing behind. However, with the growing market of China and India the US stock market share at around 45%.

According to a report by the Financial Times, the global stock market had the best quarter in almost half a decade. American stocks reportedly account for almost 65% and more than 70% in major indexes like the MSCI ACWI and MSCI World.

Amid this backdrop of US dominance, Nvidia has emerged as a standout, with market valuation surpassing the economic output of all but 11 countries.

AI’s Role in Stock Rise

As per valuations, Microsoft is the largest company followed by Apple and Nvidia. More companies include names like Alphabet, Saudi Aramco, Amazon, and Meta.

Reports  show that artificial intelligence contributed to the stock market’s rise. Meanwhile, Nvidia increased its market value by over $1T in Q1 2024, the Financial Times underlined. This increase reportedly represents around 20% of the overall growth experienced by global stock markets.

However, not all markets fared equally; China and Hong Kong experienced a considerable sell-off as per a report  by CNBC. They reportedly lost more than the total value of the Indian stock market since 2021. Meanwhile, India’s National Stock Exchange surged, becoming the fourth largest globally and the third in Asia.

As per two separate reports , India’s main stock index performed  better than many other big stock markets like the Dow Jones and the FTSE 100 in 2024. However, it didn’t do as well as Japan’s Nikkei or the US’s Nasdaq and S&P 500. The report claims that Indian stocks aren’t getting fair representation from global index funds and ETFs as they might deserve. Considering their weightage in the Morgan Stanley Capital Index (MSCI).

US to Maintain Dominance?

The US stock market’s commanding presence, constituting nearly half of the global market cap, and the exceptional valuation of companies like Nvidia, underlines its central role in the global economy.

While the US equity market continues to expand, emerging technologies like AI and emerging countries like India are major contributors to new growth.

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