Analysis of the Impact of Loosening U.S. Hegemony on the Long-Term Bull Market of U.S. Stocks

Whether the loosening of U.S. hegemony will trigger the end of the long-term bull market of U.S. stocks must be discussed from three perspectives:

. Historically, during the “Soviet Union on the offensive, U.S. on the defensive” phase from 1966 to 1981, geopolitical tensions, high inflation, and slow economic growth did lead to the U.S. stock market entering a “sideways fluctuation + high valuation correction” model. To draw an analogy today, the core features of that phase include: concerns about the survival of the global system, challenges to the status of the dollar system, cautious international capital repatriation, and high investor sensitivity to macro policy uncertainty.

The U.S. hegemony is undergoing an adjustment of “relative power” rather than “absolute collapse”. The restructuring of global supply chains, strategic technological competition, and the reduced dependence of major economies (such as China and India) on U.S. products and finance have continuously tightened the “boundaries of U.S. influence”. Such changes will prolong the

in the cycle: even if it may still benefit from U.S. technological and institutional advantages in the long run, will rely more on a “clear path” of geopolitics and policy coordination. Historical hints: In the 1970s, “institutional uncertainty” led enterprises and households to reduce risk exposure, thereby suppressing stock market performance; if combined with security experiences like the “Red Sea Incident” or the release of systemic risk expectations for important technology/financial companies via the “kill line” today, the market’s and will shift to a more cautious side.

An important reason for the decline of the U.S. stock bull market from the 1960s to the 1980s was that high inflation raised the discount rate and reduced real returns. Although today’s valuation system relies on low interest rates and technological growth, the market is gradually digesting the Federal Reserve’s expectation of “maintaining a real interest rate higher than historical levels for a long time” and matching it with a higher discount rate. Once

, the long-standing “U.S. stock growth premium” may be unsustainable, especially against the backdrop of U.S. capital outflows and declining marginal demand for U.S. assets from external capital. Historical experience reminds us that during the “double compression of valuation and liquidity” phase, capital tends to flow into more defensive assets (such as U.S. Treasury bonds, gold, or stock markets in geopolitically friendly regions), thereby suppressing the upward momentum of major stock indexes.

Historical cycles tell us: Even if the macro environment gradually cools down,

, but evolves in the way of “fluctuation - accumulation - break”. During the 1966-1981 period, the U.S. stock market showed multiple rebounds but never hit a new high, which was a typical “sideways bull market”: valuation and growth expectations were continuously adjusted until the liquidity environment changed fundamentally (such as the Fed’s policy shift in the mid-1980s) before restarting. Today, if the symbolic “soft power” or “institutional expectations” of “U.S. hegemony” suffer major setbacks (such as continuous pressure on key technology hubs, avalanche effects of financial sanctions, or cracks in the dollar-dominated capital circulation system), a similar may form. Based on this judgment, investors need to closely track: ① The inversion of global core asset yields and the risk premium curve; ② The systemic risk premium of technology and financial giants; ③ The marginal changes in dollar liquidity.

1. Adjust asset allocation based on macro pattern
   : During the period of hegemony uncertainty, it is recommended to reduce unilateral risks through the
   “diversified hedging” + “non-U.S. dollar assets”
   strategy. Consider increasing research and allocation to Asia and emerging markets (especially in the technology and infrastructure sectors), while retaining some U.S. stock leaders with dollar-denominated advantages but low leverage and stable cash flow to hedge against liquidity tightening.

2. Pay attention to the warning line of systemic fragmentation
   : Phenomena like the “kill line” remind us to monitor the impact of “government intervention or institutional risk events” on individual sectors, such as key technology export restrictions and crypto asset regulation. In practice, a dual stop-loss/reassessment mechanism of “event-driven trigger” and “volatility amplification” can be set.

3. Utilize the “sideways - outbreak” model of historical cycles
   : In the context of uncertain long-term bull markets, cyclical rebounds may still occur. It is recommended to participate in the way of
   “band trading + core defense”
   : gradually build positions after the market’s phased decline or high valuation cleaning, and increase positions in batches after policy highlights or valuation correction confirmation, but avoid full-scale chasing when valuations are high and macro uncertainty is prominent.

4. Maintain sensitivity to information and policies
   : Since hegemony and geopolitical risks are essentially policy and institutional issues, “policy叠加舆论 changes” are more triggering than pure financial data. It is recommended to use signals such as policy announcements, important meetings, and international sanction dynamics to build a model-based
   “event response framework”
   , so as to quickly adjust positions before systemic risks break out.

The changes in U.S. hegemony may indeed delay or even reshape the rhythm of the long-term bull market of U.S. stocks, but whether it really leads to an “end” still depends on the joint evolution of policy coordination, valuation adjustment, and liquidity conditions. Referring to the 1966-1981 cycle, it can be seen that against the background of huge adjustments in the power structure, the market is more likely to fall into a

, but it is not completely irreversible. The current strategy should emphasize , combined with an agile response mechanism driven by events. If more clear institutional trends emerge in the future—such as substantive challenges to the status of the dollar or the断裂 of capital and technology chains within the U.S.—it will be necessary to immediately re-evaluate the premise of “long-term allocation of U.S. stocks”. At the same time, it is recommended to use Jinling AI’s to obtain multi-market comparisons, industry depth, and valuation model verification, so as to maintain decision-making advantages in the uncertainty of geopolitics and hegemony restructuring.