For the first time in over a decade, European stocks are outperforming the U.S. in a historic run — and global investors are taking notice.
The Stoxx Europe 600 is up 11% year-to-date, eclipsing the S&P 500’s 8.8% gain, marking the strongest outperformance since 2008, according to Bloomberg.
Why It’s Happening
- Rate Cuts Coming Sooner: The European Central Bank (ECB) is expected to cut interest rates before the U.S. Federal Reserve — giving a head start to Eurozone growth.
- Cheaper Valuations: European equities remain significantly cheaper than U.S. stocks, making them more attractive in a yield-hungry environment.
- Luxury & Industrials Leading: Strong performances from names like LVMH, Siemens, and ASML are fueling the rally.
The Macro Shift
For years, investors leaned heavily into U.S. tech. But as AI enthusiasm cools and interest rate narratives flip, European cyclicals and exporters are drawing fresh capital.
The message from markets? Diversification is back.
Big Winners
- France’s CAC 40 hit record highs
- Germany’s DAX up on industrial strength
- Italy’s FTSE MIB seeing renewed inflows
Meanwhile, U.S. stocks are slowing after a red-hot Q1, and uncertainty around Fed policy is keeping risk appetite in check.
For the first time in years, Europe isn’t just the value play — it’s the growth story. While Wall Street takes a breather, Europe is leading the global equity charge.
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