Value Stocks Stage a Global Comeback as Tech Fatigue Sets In and Dollar Weakness Fuels Rotation

It’s not every day that the market’s favorite punching bags, value stocks, suddenly start punching back. But that’s exactly what’s happening as the global equity landscape shifts under the weight of tech fatigue and a dollar that’s losing altitude faster than a meme coin in a bear market. For years, the narrative was simple: buy U.S. tech, ignore everything else, and watch the world chase the same handful of tickers. Now, with the dollar in retreat and U.S. large-cap valuations looking like a late-night poker game gone wrong, the rotation into value is no longer just a trade, it’s a global phenomenon.

The numbers don’t lie. According to Seeking Alpha’s latest market summary, value stocks have outperformed growth “by a wide margin,” with large-cap tech names increasingly serving as sources of funds for a rotation into smaller-cap, value-oriented plays. This isn’t just a U.S. story. The Wall Street Journal reports that Wall Street’s hunt for cheaper stocks is going global, as high valuations and a weakening dollar drive capital into undervalued markets from Europe to Asia. The Nikkei 225’s record run is grabbing headlines, but the real action is in the quiet resurgence of value sectors that have spent the last decade in exile.

The catalyst? A perfect storm of macro and micro factors. The U.S. dollar’s sharp descent, chronicled by Seeking Alpha and echoed by every FX desk from London to Singapore, has made non-U.S. assets suddenly irresistible. With the Fed’s next move uncertain and the NFP report expected to show just +70,000 jobs (a number that would have sparked panic in any other cycle), risk appetite is shifting. Investors are no longer willing to pay nosebleed multiples for “growth at any price” when they can buy real earnings at a discount in Europe, Japan, and emerging markets. The result: a global value rotation that’s gathering momentum, even as U.S. tech stages the occasional dead cat bounce.

Context matters. For most of the past decade, value stocks were the market’s version of the Cleveland Browns, perpetually rebuilding, never quite delivering. The rise of passive investing, the dominance of U.S. tech, and the relentless bid for duration all conspired to keep value in the penalty box. But the tide is turning. Inflation is sticky, rates are higher for longer, and the dollar is no longer a one-way bet. The rotation out of U.S. large-cap tech and into global value is not just a tactical trade, but a structural shift. As the Wall Street Journal notes, America’s lead over other global markets is shrinking, and the smart money is already making the switch.

The absurdity, of course, is that this is happening with almost no fanfare. The headlines are still obsessed with Nvidia’s latest AI chip or whether Bitcoin can reclaim $50,000, but the real money is quietly rotating into value. The flows tell the story: passive outflows from U.S. tech ETFs, inflows into European and Japanese value funds, and a surge in cross-border M&A as cash-rich corporates hunt for bargains abroad. The market is finally waking up to the idea that valuation matters, and that the dollar’s decline is more than just a sideshow.

The technicals back up the narrative. Value indices in Europe and Japan are breaking out to multi-year highs, while U.S. tech is struggling to hold its gains. The rotation is broad-based, with financials, industrials, and energy all outperforming their growth counterparts. The divergence is stark: the MSCI World Value Index is up double digits year-to-date, while the MSCI World Growth Index is flat. The spread is the widest it’s been since the early 2000s, and the momentum is accelerating.

Strykr Watch

From a tactical perspective, the Strykr Watch are clear. In the U.S. the Russell 1000 Value Index is testing resistance at 1,950, with support at 1,875. In Europe, the Euro Stoxx Value Index has broken above 600, with the next target at 650. Japan’s Topix Value Index is at a 15-year high, with room to run if the yen stays weak. The technicals are bullish across the board, with moving averages sloping higher and RSI readings in the 60s, strong, but not overbought.

Volume is picking up, especially in value ETFs and mutual funds. The options market is starting to price in higher volatility for tech, but value sector volatility remains subdued. This is classic rotation: money is moving out of crowded trades and into underloved sectors, but the market is not yet at extremes.

The risk is that the rotation becomes a stampede. If the dollar’s decline accelerates, or if the Fed surprises with a dovish pivot, value could go parabolic. But for now, the move is orderly and supported by fundamentals.

The bear case is that this is just another head fake. If U.S. tech regains its mojo, or if global growth disappoints, the rotation could stall. But with valuations still attractive and flows supportive, the odds favor further gains for value.

On the opportunity side, the playbook is to buy value on dips, especially in Europe and Japan. Look for financials, industrials, and energy as the leaders. Avoid crowded U.S. tech trades, and consider hedging with long value/short growth pairs. The risk-reward is compelling, but discipline is key.

Strykr Take

The global value rotation is real, and it’s just getting started. The market is finally waking up to the idea that valuation matters, and the dollar’s decline is only accelerating the shift. This is not a trade, but a regime change. The smart money is already there. Don’t be the last one to rotate.