Mexican Stocks Hammer Wall Street As Peso Notches Best Year Since 1993

Mexican financial assets are closing out one of their strongest years in decades, stunning global investors and decisively outperforming Wall Street benchmarks.

A synchronized rally in equities and the Mexican peso has erased early fears that renewed U.S. protectionist rhetoric under President Donald Trump would derail Mexico's markets.

Instead, 2025 has turned into a historic year for Mexican assets.

Mexico's Market Rally Leaves Wall Street In The Dust

The iShares Mexico ETF (NYSE:EWW) surged more than 50% year to date – the fund’s best year since 1999 – sharply outpacing major U.S. benchmarks. For comparison, the Vanguard S&P 500 ETF (NYSE:VOO) gained roughly 17%, while the tech-heavy Invesco QQQ Trust (NASDAQ:QQQ) advanced about 21% over the same period.

Currency markets echoed the optimism. The Mexican peso has appreciated by more than 14% against the U.S. dollar, putting it on track for its best annual performance since 1993, when Mexico's central bank introduced the modern peso.

Banxico's Rate Cuts Fueled Asset Prices

A key catalyst behind the rally has been aggressive monetary easing.

Since the start of the year, the Bank of Mexico (Banxico) has slashed interest rates by 300 basis points, bringing the policy rate down to 7%.

The cuts have helped offset trade-related uncertainty while injecting much-needed liquidity into the economy, supporting equities and strengthening investor confidence in Mexican assets.

Several individual stocks delivered eye-popping returns. Mining and materials firms, in particular, benefited from higher commodity prices and renewed global demand expectations.

Industrias Peñoles S.A. de C.V. (OTC:IPOAF) surged more than 260%. Gentera SAB DE CV (OTC:CMPRF)climbed over 100%.

CEMEX SAB DE CV Sponsored ADR (NYSE:CX) and Grupo México SAB DE CV (OTC:GPMXY) both rose more than 80%.

A Growing Disconnect From the Real Economy

Despite booming markets, Mexico's underlying economy tells a far less enthusiastic story.

Mexico's economy slipped into contraction in the third quarter, with GDP falling 0.2% after flat growth in the second quarter.

The slowdown led Banxico to cut its 2025 growth outlook to 0.3%. While the central bank projects a gradual rebound to 1.1% in 2026 and 2% in 2027, near-term economic momentum remains fragile.

Wall Street analysts remain cautious. Bank of America economist Carlos Capistran noted that consumption remains fragile, with year-to-date growth near 0.1%.

Declining remittances, modest formal job creation, slowing credit growth, and weak consumer confidence continue to weigh on the economy—despite support from government transfers and lower interest rates.

What Could Change For The Mexican Economy In 2026?

Capistran pointed to potential upside catalysts.

He said, "Upside risks include the FIFA World Cup and the review and finalization of the USMCA, which could reduce trade-related uncertainty and support sentiment."

On policy, Capistran said, "If weakness persists, the central bank may continue cutting rates to stimulate demand."

For now, investors appear focused on falling rates and currency strength. Whether Mexico's economy can catch up with its booming markets remains the key question heading into 2026.

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