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US stocks have had a rapid run of outperformance over the last month, with the S&P 500 now ahead of the MSCI ACWI Ex-US index for the first time this year. The equal-weighted versions of the indices also show US stocks outperforming lately. Coincides with a significant dollar rally as well.

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Rising rates have pushed investors toward the rate-resistant Tech/AI sector, and that means buying more US stocks. The fact that the Fed has indicated more rate hikes to come has helped give the US dollar a boost and thus makes ex-US investors want to own US assets, mostly equities.

Dollar strength often widens the gap between US and overseas benchmarks. The move aligns with broader risk compression rather than sector rotation alone.