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U.S. stocks are off to one of the best starts to a year in the past three decades – Tuesday afternoon's slide notwithstanding.

Canadian equity performance in 2018, meanwhile, is having its strongest start since, well, 2017.

Coming off what was a banner year for American stocks, share prices have since gathered even more speed, taking indexes deeper into record territory and stoking fears of a valuation bubble.

Canadian stocks can't seem to catch that same fire, as the early results in 2018 closely resemble the year just past, with domestic performance badly lagging state-side counterparts.

On Tuesday morning, the Dow Jones industrial average broke through the 26,000-point threshold for the first time, if only briefly.

The rally fizzled after a report that President Donald Trump's former chief strategist Steve Bannon has been subpoenaed to testify before a grand jury over potential links between Russia and Mr. Trump's campaign.

U.S. investors seem to have grown increasingly bullish of late over strong economic readings, part of an expansion that looks to be globally synchronized.

Strong corporate earnings have also supported equity upside, while Mr. Trump's tax bill has likely improved the profit outlook even further through corporate tax cuts.

The Dow is up 4.3 per cent since the start of the year as of Tuesday's close. All but four of the index's 30 component stocks are up on the year.

The U.S. market has been led this year by cyclical sectors, such as financials, industrials, technology, and consumer discretionary, all of which tend to do well as the economy improves.

The laggards are mostly made up of rate-sensitive and dividend-heavy sectors, which typically fall out of favour in a rising-rate environment.

That dichotomy has also been apparent in Canada as rising rates and the expectation for another Bank of Canada rate hike on Wednesday have penalized dividend payers. The yield on five-year Government of Canada bonds recently poked above 2 per cent for the first time in five years, in part over the recent flare-up of tensions surrounding North American free-trade agreement negotiations.

Stocks with generous dividend payouts, such as the pipelines and Canada's big telecoms, have been among those exerting the most negative influence over the S&P/TSX composite index this year.

The headwinds in the Canadian market have also kept the energy sector from participating in what has been the strongest global crude oil market in three years. With West Texas Intermediate hitting $64 (U.S.) for the first time since late 2014, the domestic oil and gas sector has declined almost 2 per cent over the past 10 trading days.

And, despite all of the investor attention on cannabis stocks, they are not big enough to influence the S&P/TSX composite index in any substantial way.

All of which has meant that domestic shareholders can only look south with envy, a feeling that has become familiar over the past year.