S&P 500 vs Emerging Markets
Live side-by-side comparison with current values, changes, and key statistics.
Why This Comparison Matters
US equities have dominated emerging markets for over a decade, driven by dollar strength, tech sector outperformance, and higher US growth. When this relationship reverses, it typically signals dollar weakness, commodity strength, and a shift in global capital flows. The US-vs-EM relative performance is one of the most important macro rotation signals in global equity markets.
Cross-Asset Analysis
Before getting to the spread, note what each leg actually represents: S&P 500 ETF (SPY) is SPDR S&P 500 ETF, tracks the benchmark US equity index, and Emerging Markets (EEM) is iShares MSCI Emerging Markets ETF. Mid-cycle stretches see the S&P 500 ETF (SPY)-Emerging Markets (EEM) spread compress as macro volatility stays low and factor returns normalize. In bull markets the more aggressive peer between S&P 500 ETF (SPY) and Emerging Markets (EEM) usually leads, while bear markets shift leadership toward the more defensive peer.
Performance attribution leans on S&P 500 ETF (SPY)-Emerging Markets (EEM) spreads to separate security selection from style allocation inside multi-manager mandates. Interest rate cycles drive S&P 500 ETF (SPY) versus Emerging Markets (EEM) relative performance through discount-rate sensitivity, with longer-duration exposures suffering more when rates rise. Factor tilts expressed through the S&P 500 ETF (SPY)-Emerging Markets (EEM) selection allow managers to adjust style exposure without changing their overall asset allocation.
The S&P 500 ETF (SPY)-Emerging Markets (EEM) spread captures the tilt between two variants of the same asset: one may be more defensive, one more cyclical. S&P 500 ETF (SPY) and Emerging Markets (EEM) look similar at a glance, but the embedded factor tilts between them matter a great deal over time.
90-Day Statistics
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Frequently Asked Questions
What is the relationship between S&P 500 ETF (SPY) and Emerging Markets (EEM)?+
S&P 500 ETF (SPY) and Emerging Markets (EEM) are connected through shared asset class exposure with different factor tilts. When the underlying asset class shifts, both respond, though with different sensitivities and at different speeds. The spread between S&P 500 ETF (SPY) and Emerging Markets (EEM) captures the specific macro signal that flows through this relationship.
When does S&P 500 ETF (SPY) typically lead Emerging Markets (EEM)?+
S&P 500 ETF (SPY) tends to lead Emerging Markets (EEM) during rotation episodes between the two factor exposures. In those periods, moves in S&P 500 ETF (SPY) precede corresponding moves in Emerging Markets (EEM) by days to weeks, depending on the transmission channel and the depth of each market.
How are S&P 500 ETF (SPY) and Emerging Markets (EEM) historically correlated?+
Long-run correlation between S&P 500 ETF (SPY) and Emerging Markets (EEM) varies by regime. Peers in the same asset class are highly correlated in direction, with the spread reflecting factor tilts and rotation dynamics. The correlation is not stable: it shifts with macro conditions, and the periods when it breaks down are often the most informative moments in the S&P 500 ETF (SPY)-Emerging Markets (EEM) relationship.
What macro conditions drive divergence between S&P 500 ETF (SPY) and Emerging Markets (EEM)?+
Divergence between S&P 500 ETF (SPY) and Emerging Markets (EEM) typically arises from index reconstitution, mega-cap earnings surprises, or liquidity differences between the peers. When one asset's idiosyncratic drivers dominate, the spread moves in ways that the common macro story does not predict, which is usually a signal to look more carefully at the specific drivers at work in S&P 500 ETF (SPY) or Emerging Markets (EEM).
Is S&P 500 ETF (SPY) a hedge for Emerging Markets (EEM)?+
Peers like S&P 500 ETF (SPY) and Emerging Markets (EEM) do not hedge each other; both rise or fall with the shared asset class, and using the pair as a spread trade is different from using it as a hedge. Effective hedging requires matching the hedge to the specific risk being protected, and the S&P 500 ETF (SPY)-Emerging Markets (EEM) pair is best stress-tested under scenarios the investor most worries about before being sized into a real portfolio.
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Data sourced from FRED, CoinGecko, CBOE, and other providers. This page is for informational purposes only and does not constitute financial advice. Past performance does not guarantee future results.