Emerging markets are having quite a year. The MSCI index jumped 30% through 2025—beating both the S&P 500 and the Magnificent Seven tech stocks that have dominated headlines. Pretty impressive when you consider the tariff uncertainties looming over some of the biggest emerging economies.

The numbers tell an interesting story. These markets are moving faster than the US large-cap index, and they're even outrunning the narrow group of mega-cap tech darlings. But here's the thing: tariff threats remain a wild card. Several key emerging markets depend heavily on US trade, so any escalation could shift the momentum.

For traders watching macro trends and asset allocation plays, this performance gap is worth paying attention to. The rotation out of the usual suspects and into emerging market exposure suggests appetite for diversification or positioning ahead of potential trade shifts.