HQ Trust Analysis: Why you shouldn't sell US stocks when the dollar is weak

The recent past also fits this pattern. Between January and July 2025, the dollar again depreciated by 13 percent against the euro. This weakness was triggered by monetary policy divergence between the Fed and the European Central Bank, political uncertainty, and declining demand for the US currency.

But once again, US stocks defied the currency trend: The S&P 500 recorded a 7 percent gain during this period. "This confirms the robust behavior of American stock markets even in times of weakening dollar strength," You said.

Why a weak currency doesn't prevent strong stocks

The analysis shows that in six out of ten cases examined, the S&P 500 gained significantly more than the euro lost against the dollar. This suggests that a weaker dollar can actually be beneficial for American companies.

Export-oriented US corporations benefit from a weaker domestic currency, as their products become cheaper abroad. At the same time, revenues from foreign business, converted into dollars, increase. Multinational corporations that generate a large portion of their sales outside the US can thus increase their profits.

The longest and most severe dollar depreciation phases each lasted around two years. Even during these extended periods of weakness, US stock returns remained positive, underscoring the robustness of the observed phenomenon.

“Since 2002, every phase of strong depreciation of the US dollar against the euro has been accompanied by a positive performance of the S&P 500,” the analyst summarizes.

For German investors, this means that a weakening dollar should not automatically be interpreted as a sell signal for US stocks. Rather, American companies can leverage their operational strength and reward investors even in times of currency weakness.