New York CNN Business  — 

Wall Street is giddy about the possibility that the Federal Reserve could lower interest rates as soon as July. The S&P 500 traded at an all-time trading high Thursday. But some experts think it’s time investors look outside the United States.

“There are bigger and better opportunities in emerging markets like China and India,” said Chris Gaffney, president of world markets for TIAA Bank.

Gaffney said that is partly because valuations for stocks in those markets are more attractive than in the United States. The S&P 500 (SPX), after all, is now up 18% this year while the Nasdaq (COMP) has soared more than 20%.

Weaker dollar could boost global stocks

But the strong signal about possible rate reductions from Fed chair Jerome Powell — as well as the Fed’s so-called dot plots that showed some individual members predicting several cuts this year and in 2020 — also caused the dollar to fall.

That should make international stocks more attractive: A weaker dollar tends to help boost stock prices abroad.

“Emerging markets finally have some breathing space to rally. They could really outperform because of currency moves, since investors now think the US dollar will fall further,” said Olivier Marciot, senior portfolio manager with Unigestion.

This might be the case for investors in bonds too.

Investors can find better options in countries where interest rates are higher and have more room to fall than in the United States, said Mike Collins, a senior portfolio manager for PGIM Fixed Income. He pointed to Mexico as an example.

“Inflation is falling globally and many central banks around the world will follow the Fed,” Collins said. “There are higher yields outside the US. It’s like the Super Bowl for bond geeks and we may get another one on July 31 if the Fed actually cuts rates at its next meeting.”

Too far too fast?

Some experts are worried that the stock market is getting ahead of itself — particularly since trade tension between the US and China is far from over.

“It is definitely a Bizarro type of world. The bond market is pricing in doom and gloom while stocks are partying,” said Nancy Davis, portfolio manager for the Quadratic Interest Rate Volatility and Inflation Hedge ETF (IVOL).

Davis said she’s a fan of diversification and thinks investors should still be looking outside the United States for value. But the problem is that most global markets have already rallied sharply this year.

“It’s a tough environment globally,” Davis said. “There are not many options that look like a good value right now.”

But the path of least resistance for the stock market — especially in the United States — may still be higher, said Hugo Rogers, chief investment strategist with Deltec. That’s because the Fed has given investors the green light to keep buying.

“Are US stocks attractive from a long-term valuation perspective? No. But is it possible for US stocks to keep in moving up? Yes. The Fed is not giving investors any other choice,” Rogers said.

Rogers conceded that international markets do have better bargains. But there may be too many geopolitical risks to make stocks in China, India or even Europe and Japan worthwhile.

“Other markets are cheaper but for a good reason,” Rogers said. “If you invest globally, you are wading into the murky waters of Trump tariff tweets and the potential for more fireworks. Proceed with caution.”