S&P 500: The World’s Favorite American Slot Machine—Now Accepting Global Pocket Change

The S&P 500: America’s Favorite Slot Machine, Now With Global Side-Bets
By Matteo “Machiavelli” Mwangi, Dave’s Locker International Correspondent

ZURICH—On a rainy Tuesday, while the rest of us mortals queued for overpriced coffee, the S&P 500 quietly added another 0.7 %, reminding the planet that 500 U.S. companies remain the unofficial referee of world self-esteem. From pension funds in Perth to sovereign wealth slush piles in Oslo, the index is less a barometer of American prosperity than a planetary mood ring—currently flashing a smug emerald as long as the Federal Reserve keeps whispering sweet nothings about “transitory” everything.

Let’s get the obvious out of the way: the S&P 500 is technically an American stock index. But in practice it is the financial equivalent of a Hollywood blockbuster—bankrolled by foreign ticket sales, subtitled in 40 languages, and blamed for cultural imperialism even as audiences line up for popcorn. Roughly 40 % of S&P revenue is earned outside the United States, which means every time a Bavarian buys an iPhone or a Jakarta office drone clicks “purchase” on Amazon, the index ticks up and some hedge fund in Greenwich mentally books another château in Provence.

The darkly comic twist? The higher the S&P climbs, the louder the rest of the world pretends it doesn’t care—right up until it suddenly does. When the index sneezed in March 2020, emerging markets caught double pneumonia; when it rebounded, the same countries were told to applaud the miracle of globalized capitalism while still paying pandemic-era compound interest to the IMF. Call it the locust logic: we swarm in, feast on the gains, then blame the locals for not planting better hedges.

Europe, ever the sultry tragic heroine, watches the S&P with the ambivalence of a spurned lover. German carmakers need Tesla to stay above $700 so their own valuations don’t look like East-German Trabants. Meanwhile, the European Central Bank quietly buys U.S. equities via the monetary-policy back door, a financial kink akin to wearing your ex’s hoodie in the dark. Across the Channel, Brexit Britain clings to the S&P like a life raft made of NFTs—desperate to prove that leaving the EU was not the geopolitical equivalent of shorting your own currency.

Asia, for its part, has turned the index into a contact sport. Chinese regulators ban after-school tutoring one week and watch Alibaba drop 30 % the next, dragging the S&P down a polite 1.2 %. The People’s Bank of China then floods the market with liquidity, and presto—the U.S. futures tick green by dawn, because nothing says “free market” like coordinated state intervention on two continents before breakfast. Japan’s Government Pension Investment Fund, the world’s largest, has gone full fanboy, allocating record billions to the S&P because domestic bonds now yield roughly the emotional satisfaction of origami.

And then there’s the retail brigade—Robinhood day-traders in Ohio, crypto refugees in Lagos, and Indonesian TikTok influencers who’ve swapped skincare tutorials for margin-trading explainers. They all worship the same candlestick charts, the only universal language besides the shrug emoji. When the index hits a record, they post screenshots of green triangles; when it dips, they blame shadowy “whales” instead of the perfectly visible whale that is Jerome Powell’s printer. The shared delusion is almost touching, like a global potluck where everyone brings ramen but insists it’s Michelin-star cuisine.

Of course, the higher the S&P levitates, the thinner the oxygen. Valuations now require a telescope and a forgiving imagination; the index trades at roughly 22 times forward earnings, or—translated into human terms—like paying for a Manhattan studio that may or may not have indoor plumbing. Bears growl that gravity still exists, but the bulls counter with the immortal words of every late-night infomercial: “Past performance is no guarantee of future results—unless central banks keep cutting checks.”

So where does this leave the rest of us—billions of non-American earthlings whose fates are tethered to the quarterly spasms of 500 companies headquartered between Delaware and Silicon Valley? In the cheap seats, munching metaphorical popcorn, watching a live-action sequel where the hero always survives because the scriptwriters own the studio. The credits never roll, the popcorn is increasingly salty with our own tears, and yet we stay for the post-credit scene every time—because walking out would mean admitting the theater is on fire.

Fade to black. Buy the dip?