"U.S. stocks have made furious rebounds, setting fresh record highs and eroding the outperformance that European markets have enjoyed for much of this year. The S&P 500 is now up 13% year to date and the Nasdaq is up 17%. As recently as late June, when the broad market index had retaken its prior all-time high, both were up 5%."
"Meanwhile, the DAX stock market index in Germany is up 19% so far this year, down from 20% in June. Other gauges have gained ground, but not as much as U.S. stocks have. The FTSE 100 in the U.K. is up 13% versus 8% in June. And the MSCI Europe stock index has jumped 25% for the year, up from 21%."
"Sentiment has shifted dramatically about Europe. Investors are getting more nervous about the deficit outlook in the U.K. and France, while economic growth remains subdued. And hopes for a burst of government spending and deregulation have failed to materialize so far. "Outside Germany, investors appear frustrated with the lack of progress: there are no signs of the German government turning on the spending machine,"
U.S. stocks have rallied sharply, reclaiming losses after earlier tariffs and eroding Europe's lead. The S&P 500 is up 13% year-to-date and the Nasdaq 17%, reversing June levels. European indexes such as Germany's DAX and MSCI Europe remain higher for the year, but momentum has cooled as investors grow uneasy about UK and French deficits, sluggish growth, and absent government spending or deregulation. Outside Germany, perceived delays in defence and infrastructure spending have raised doubts about long-term growth. By contrast, U.S. gains have been driven by bullishness on AI, easing trade tensions, strong corporate earnings, GDP growth, consumer resilience, and tax cuts.
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