The S&P 500, tracked by SPDR S&P 500 (SPY  1.78%), has recorded its largest quarterly underperformance against global markets in 37 years.

What Happened: The U.S. benchmark index trailed the MSCI All Country World Excluding United States Index by the widest margin since 1988, according to Bloomberg data shared by Barchart on Monday.

The performance gap marks a notable reversal from recent years when U.S. stocks frequently outpaced international markets.

Large-cap technology stocks drove much of the quarterly decline, according to data from Benzinga Pro. Trade Desk (TTD  1.04%) fell 53.99%, Deckers Outdoor (DECK  -0.53%) dropped 46.13%, and Marvell Technology (MRVL  1.10%) lost 45.40%. Tesla Inc. (TSLA  -0.04%) declined 38.95% during the period.

The technology sector's weakness is reflected in the iShares Semiconductor ETF (SOXX  2.16%), which fell 11.9% in March alone. The broader tech-focused Nasdaq 100 dropped 1.1% as semiconductor companies weighed on performance.

Why It Matters: Energy emerged as the quarter's strongest sector, tracking toward its fourth consecutive positive month with year-to-date gains of 8.5%. The Energy Select Sector SPDR Fund (XLE  2.48%) outperformed other sectors in recent trading.

Goldman Sachs, citing the changing market dynamics, lowered its S&P 500 earnings growth estimates to 3% for 2025 and 6% for 2026, down from 7% previously for both years.

Meanwhile, as U.S. stocks struggled, gold prices reached $3,115 per ounce, posting their strongest three-month rally since 2009.

Historical perspective from Bloomberg data indicates the performance gap between U.S. and global stocks has fluctuated significantly over time, with the S&P 500 occasionally outperforming global markets by up to 15 percentage points in the early 1990s, late 1990s, and mid-2000s.