Nobody would be much impressed if you guessed that the US Nasdaq 100 index has done almost three times as well as the Stoxx Europe 600 so far this year. But the reasons for that outperformance are less obvious than they might appear.
Sure, there is some AI mania behind the Nasdaq’s return of more than 20 per cent so far in 2026. Tech stocks led the growth in the S&P 500’s first-quarter earnings — which, at 25 per cent, was more than three times faster than that of the European Stoxx 600 index, based on Bloomberg figures cited by Deutsche Bank. But US earnings growth was broad, not least because the US economy was less hard hit than Europe’s by the Iran war during the second quarter.
Still, investors should not write off the old continent altogether. Strategists at Deutsche Bank and Barclays this week removed their underweight recommendations on European stocks. The postwar peace dividend, assuming war really is over, looks juicier on the European side of the pond.