July 2, 2026
Whether you’re marking America’s 250th birthday with fireworks, a backyard barbeque or a Ken Burns film, there’s no shortage of ways to celebrate this milestone.
For investors, the occasion allows time for reflection. At 250, the U.S. economy remains the envy of the world, even as the global system is undergoing dramatic changes. Below are six charts that highlight how we got here and where we may be headed.
Since the signing of the Declaration of Independence, the U.S. has grown from 13 colonies into a global superpower of roughly 340 million people, or 4% of the world’s population. “Westward expansion has helped the nation transform into an economic giant that today generates 27% of the world’s output. U.S. companies rank among the world’s most valuable, while American sports, movies and pop culture continue to resonate with audiences worldwide,” says U.S. economist Jared Franz.
Sources: Capital Group, Box Office Mojo, Forbes, IMF World Economic Outlook, MSCI, RIMES, U.S. Census Bureau. 50 all-time highest grossing movies are ranked in nominal USD, based on Box Office Mojo data as of May 31, 2026. Gross domestic product based on IMF World Economic Outlook data as of 2025. Top 50 sports franchises based on Forbes data as of December 18, 2025. Top 100 firms by market capitalization in USD based on the 100 largest constituents in the MSCI All Country World Index as of May 31, 2026.
Nearly two centuries ago, French sociologist Alexis de Tocqueville described America as the most easily changeable society. That framework has been especially visible in its embrace of technologies that expand growth and improve the quality of life for Americans.
The success of the Erie Canal helped spark a canal building boom in the 1820s, cutting transportation costs by 90% and connecting markets across the young nation. Railroads in the late 19th century extended the nation’s capacity to explore new lands and accelerated commerce. In the 20th century, mass-produced Model T cars, the broad adoption of telephones and the invention of computers boosted productivity and opened new markets.
Sources: Capital Group, Harvard Business School Cross-country Historical Adoption of Technology (CHAT) Dataset. Rate values interpolated between adjacent observations where source data is not available.
Today, artificial intelligence promises to be a long-term value creator. “Within every industry, companies will leverage AI to create differentiated competitive advantages,” says Jessica Spaly, portfolio manager for The Investment Company of America®.
“Similar to how companies like Amazon and Home Depot changed retail during the digital transformation era, I think new and established companies will create moats for themselves with AI. We are still in the early stages, however, as the market is currently more focused on the chips, hardware and platforms that AI runs on.”
French policymakers in the 1960s called the dollar’s status as the world’s reserve currency an “exorbitant privilege.” That advantage helped sustain decades of economic growth, military might and global influence.
“The U.S. emerged from World War II as a nation that could lead global reconstruction efforts and provide stability, which helped pave the way for the U.S. dollar to become the world’s reserve currency,” says David Hoag, principal investment officer for CGCP — Capital Group Core Plus Income ETF.
“Over time, this meant that the U.S. could issue debt at lower yields than other countries, absorb currency risks, or even use the dollar to enforce sanctions. Especially during times of crisis, the U.S. government generally has no problem financing a large budget deficit while at the same time being in full quantitative easing mode,” he explains, referring to the practice of central banks purchasing government bonds and other securities to keep interest rates low.
“The recent trend of central banks diversifying away from the dollar will likely continue,” Hoag adds, “but no currency is close to supplanting it as the world’s reserve currency.”
Sources: Capital Group, Eichengreen, Mehl and Chiţu (2017), How Global Currencies Work: Past, Present and Future, Princeton University Press, Princeton, New Jersey. In 2002, the euro replaced the French franc and Deutsche mark. Selected years shown. Shares reflect disclosed global foreign exchange reserves at market exchange rates and may not sum to 100% due to rounding.
“The intersection of world-class research and development, as well as strong ties to academia and easy access to capital, are unique U.S. advantages difficult to replicate elsewhere,” says Rob Lovelace, equity portfolio manager of New Perspective Fund® and chair of Capital International. “Each reinforces the other and helps create a constant innovation loop.”
Sources: Capital Group, World Bank: World Development Indicators. Figures shown are annual from 1996 to 2023, using latest available data as of June 30, 2026. Research and development (R&D) spending includes both capital and current expenditures across business enterprise, government, higher education and private nonprofit sectors.
Healthcare innovations in vaccines, surgery, blood storage and transfusion, chemotherapy and more have saved lives worldwide. “This is an industry built on decades of effort, where fewer than 5% of drugs succeed,” Lovelace says. “Yet capital continues to flow in hopes of funding the next generation of treatments or drugs that help patients live better lives.”
According to Lovelace, “AI could accelerate drug discovery in the coming decades. If the technology can help identify which drugs are more likely to fail and those more likely to succeed earlier in the process, we could potentially raise the success rate to 10%. We might even be getting closer to actual cures for certain diseases.”
From sea to shining sea, the U.S. has fertile farmland, abundant oil and gas reserves, and vast natural resources. Combined with technological innovation, these advantages help America prosper.
“A key turning point for energy independence came in the early 2000s, when the U.S. commercialized hydraulic fracking and began to dramatically increase oil and gas production by applying pressurized liquid into shale rocks,” says Paul Benjamin, portfolio manager for CGGR — Capital Group Growth ETF.
“Today, the U.S. is the world’s largest energy producer, which gives Americans and its companies several advantages. Lower energy prices, particularly for natural gas and coal, which account for 45% of U.S. primary energy consumption, mean companies can build manufacturing facilities here versus Europe or Japan where energy prices are more volatile.”
The U.S. is also now more resilient to global energy price shocks. “Assuming disruption is short-lived, the U.S. today can better weather war in the Middle East compared to decades ago,” Benjamin adds.
Sources: Capital Group, U.S. Energy Information Administration. Data includes petroleum and other liquids such as biodiesel, ethanol, liquids produced from coal, gas, and oil shale, Orimulsion, blending components, and other hydrocarbons. Latest data available is 2024 as of February 28, 2026.
The U.S. stock market has shown remarkable resilience through wars, financial crises and pandemics. “The incredible thing about the way the stock market works is as long as you've got companies doing amazing things, enabling them to grow and create new products, it's a flywheel,” says Lovelace. “It's a geometric process, not an arithmetic process, in terms of the benefits to investors.”
Sources: Capital Group, S&P Global, RIMES. As of May 31, 2026. Data is indexed to 100 as of January 1, 1928, based on cumulative total returns for the S&P 500 Index. Shown on a logarithmic scale. Past results are not predictive of results in future periods.
Lovelace notes that when he started his career, a 7% average annualized return was considered reasonable, with much of that driven by inflation. As inflation declined, many investors expected the total return on the market also would come down.
Instead, the opposite happened. “If you look at the long-term numbers now, even with the bear market in 2022, the compounding of the U.S. stock market since the 1970s is north of 9%.” The lesson: Despite periods of upheaval throughout America’s history, long-term compounding has rewarded investors.
Jared Franz is an economist with 20 years of investment industry experience (as of 12/31/2025). He holds a PhD in economics from the University of Illinois at Chicago and a bachelor’s degree in mathematics from Northwestern University.
Jessica Spaly is an equity portfolio manager with 27 years of investment industry experience (as of 12/31/2025). She holds an MBA as well as a bachelor’s degree in economics from Harvard.
David Hoag is a fixed income portfolio manager with 38 years of investment industry experience (as of 12/31/2025). He holds an MBA from the University of Chicago and a bachelor's degree from Wheaton College.
Paul Benjamin is an equity portfolio manager with 20 years of investment industry experience (as of 12/31/2025). He holds an MBA from Stanford and a bachelor’s degree in finance and religion from Northwestern College.
Rob Lovelace is an equity portfolio manager and chair of Capital International, Inc. He has 40 years of investment industry experience (as of 12/31/2025). He holds a bachelor’s degree in mineral economics from Princeton. He also holds the Chartered Financial Analyst® designation.
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