Emerging market stocks soar 7% in 2026 as investors drift from US dollar assets

In early 2026, emerging market equities have risen about 7%, sharply outperforming the S&P 500’s 1% gain as investors reallocate away from US dollar assets and Treasuries. Major EM indexes logged a fifth straight week of advances, with Asia’s technology sector and Latin American shares, up 13% this year, leading the move. China’s central bank backed yuan strength, several EM currencies appreciated more than 3%, and a leading EM ETF drew over $6.5 billion in January amid renewed de-dollarization themes.