Don’t call it a G7 comeback

Over the past few years, the idea that the Group of Seven (G7) is in decline has hardened into conventional wisdom. And by one metric—the bloc’s shrinking share of global GDP—that assessment holds true. At the GeoEconomics Center, we have tracked this shift ourselves.

Yet GDP tells only part of the story. On a range of other measures, the G7 continues to retain significant sway over the global economy. Consider its central role in sanctions coordination or its vast strategic oil reserves, some of which were released in March to cushion supply disruptions stemming from the Iran war.

Most importantly, however, the group still anchors the global financial system. And nowhere has that reality been more evident than in the recent resurgence of G7 strength in equity markets. While the bloc’s share of global equity gradually fell from 92 percent in 1975 to 54 percent in 2010—with a particularly sharp decline in the 2000s, as emerging markets surged—it has since staged a remarkable recovery. Today, the group once again controls 72 percent of global equity.

What’s driving this resurgence? A closer look at the data reveals that the answer lies not in a broad-based G7 comeback, but in the extraordinary performance of a single country: the United States.

Fueled largely by the technology stock boom that accelerated after 2022—and amplified by a handful of major companies—the US now accounts for more than 50 percent of global equity valuation. It’s the first time in nearly four decades that it occupies such an outsized position.

The decline and return of US financial dominance

This marks a dramatic reversal from the trajectory that defined much of the late twentieth century. Beginning in the early 1970s, US equities steadily lost ground relative to the rest of the world, a trend that culminated in 1985, when the rest of the world overtook the United States in global market capitalization. That shift was driven in large part by Japan’s extraordinary asset bubble, which propelled Tokyo to the center of global finance before bursting in the early 1990s.

Although the latest surge in US equity dominance accelerated after 2022, the broader trend began much earlier. In the aftermath of the 2008 global financial crisis—which originated in the US before cascading across the world—US equity markets began a sustained rebound, ultimately reversing decades of relative decline. Ironically, the same crisis that exposed deep vulnerabilities in the US financial system also helped cement the country’s long-term market supremacy.

Yet this apparent resurgence tells only part of the story. Much of the recent growth in US equity valuations has been driven by just seven companies: Nvidia, Microsoft, Apple, Alphabet, Amazon, Meta, and Tesla—the so-called Magnificent Seven. Together, they now account for more than 30 percent of the S&P 500’s total valuation. Remove those firms from US market capitalization, and the G7’s combined share of global equity drops from 72 percent to roughly 56 percent—just barely above its 2010 level.

Market concentration, of course, is not a new phenomenon in US finance. During the 1960s and 1970s, investors spoke of the “Nifty Fifty,” a group of roughly fifty large-cap companies listed on the New York Stock Exchange that came to dominate market performance. But today’s environment is even more extreme. Instead of fifty firms driving returns, there are effectively just seven. That degree of imbalance has already prompted warnings from the IMF about rising risks associated with market concentration, now seen as among the most elevated in modern financial history.

Tech momentum trumps global instability

Given the scale of recent shocks to the global economy, the surge in global equity valuations may seem counterintuitive. The global trade system is fragmenting, wars continue to rage in Europe and the Middle East, and geopolitical rivalry between the United States and China is intensifying. Yet markets have remained strikingly resilient.

In 2025, major indexes in China, France, and Germany have gained more than 10 percent, while those in Canada, Japan, the United Kingdom, and the United States have risen by more than 20 percent. Investors, for now, appear less concerned with geopolitical instability than with the scale and transformative potential of technological innovation—and its implications for growth and corporate earnings. Against this backdrop, the data may not signal a return to broad-based and robust G7 dominance at all, but rather something far narrower—and potentially more fragile: an era of US market supremacy powered by a handful of technology giants. And history suggests that such periods of extreme market concentration rarely last forever.

Bart Piasecki is an assistant director at the Atlantic Council’s GeoEconomics Center.

This post is adapted from the GeoEconomics Center’s weekly Guide to the Global Economy newsletter. If you are interested in receiving the newsletter, email JYin@atlanticcouncil.org.

Image: French Economy Minister Roland Lescure poses with G7 Finance Ministers during a group photo at the French Finance Ministry in Paris on May 19, 2026. Source: REUTERS/ABACA Press/Firas Abdullah.