Market News
European stocks' 2025 outperformance is over, but don't forget the euro - REUTERS
- Surging tech stocks led the U.S. rebound
- Europe bulls confident in higher European GDP growth
- S&P 500 still lower if priced in euros
LONDON, July 7 (Reuters) - European stocks took an early lead in 2025, outperforming Wall Street thanks to erratic U.S. policymaking and Germany's once-in-a-generation fiscal shift, but U.S. markets have caught up.
The broad European STOXX 600 index was up 6.6% so far this year, as of Friday's close, compared with 6.8% for the S&P 500. (.STOXX)
In March the STOXX was 10 percentage points ahead, leading European bulls to think this might be their time after years of European markets underperforming Wall Street.
Calls for European outperformance still ring true in currencies, however, with the euro up 14% against the dollar year to date.
Trade talks and the new U.S. tax-cut and spending law are tests for the rotation out of the U.S. and into Europe, said UBS Asset Management's head of global sovereign markets strategy Max Castelli.
"I don’t think U.S. exceptionalism will come back with the same strength and intensity," he said. "But I would not rule out the big period of outperformance of European assets over the U.S. being over."
Here's a look at how Europe's performance against the U.S. stacks up.
BIG TECH IS BACK
Marija Veitmane, head of equity research at State Street Global Markets, said Wall Street shares started bouncing back in mid-April, partly because the "trade war became trade negotiations."
