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The comeback from Wall Street from Turbulence tariff in order to achieve a record high, has dramatically restricted the gap in European shares and tested the stette of investors who bet on an era of the state of emergency for US markets.
The Blue Chip S&P 500 share index has 10 percent higher in the second quarter of the year and overstrips the regional Stoxx 600 in Europe, which has increased less 2 percent, as well as other large global indices.
The outperformance of American stocks Confused the bets that US President Donald Trump’s chaotic tariff policy would trigger a permanent rotation into other markets, especially in Europe, where hopes for expenses for defense and infrastructure had come up at the beginning of 2025. Instead, investors have flooded the Tech shares that had driven the market for the Rally market from recent years.
“In the second quarter, what we saw is a reversal of the game book,” said Shep Perkins, Chief Investment Officer of the Equity Fund Manager Putnam Investment.
European shares The US colleagues still exceed in 2025, which is driven by optimism that the width movement towards fiscal stimuli and reforms to bring the economies of the block closer will generate growth. The Regional Stoxx Europe 600 is 7 percent higher in 2025 compared to 5 percent for S&P.
However, the latest underperformance in Europe is the fear of anxiety that the region cannot maintain the dynamics, which by Germany’s 1 € “whatever it needs” from the expenditure plan for defense and infrastructure.
“The European problem has always been profits, profits and profits,” said DEC Mullarkey, Managing Director of Fund Manager SLC Management. “You can discuss the US reviews you like, but these shares are supported by solid balance sheets. The European trade is far more speculative, it depends on Germany, for example the infrastructure plan.”
Optimism about the prospects of Europe is not yet useful in economic data. The European Commission last month revised After his growth forecasts according to Trump’s broad side. Consumer and business feelings for both the EU and the euro area decreased in June, according to a survey of commissions published last week.
In the meantime the United States had more robust The number of jobs as expected, and unemployment keeps stable despite predictions of a trade war.
US shares were also underpinned by both retail investors who stacked in shares. “Buy the DIPAnd from companies that have grown on themselves by buying their own stocks back in record quantities.
Nvidia, the main engine of the Wall Street KI rally, reached a record high last week. The Big Gainers included the chairman of Peter Thield Data Intelligence Company Palantir, in the second quarter of more than 50 percent, and the cryptocurrency exchange coin that has doubled when investors plunge into crypto shares.
Since large tech shares take the lead, a strongly predicted expansion of the return on equity has stalled. An alternative version of the S&P, which weights the components equally, is its traditional, market capitelle equivalent this year.
Some investors adhere to their expectations of wider rotation outside the US markets, since global investors question the great overweight that they have built up in dollar assets.
Although the shares have restricted the performance gap in the second quarter, the dollar remains 13 percent lower compared to the euro – which means that the return still gives a wide Golf in the same currency, and the US state bonds are under pressure because they burden the concerns about increasing American debt burden.
Goldman Sachs analysts said in a note last week that the US shares had been stretched and even adapted the larger return on equity that US companies offered. “The era of diversification has started,” wrote the analysts. “We think it has to go on.”
Some investors believe that turbulence could return to Wall Street if Trump continues to wage his trade war. The president’s 90-day break to so-called mutual tariffs expires early next week, and the USA remains in negotiations with countries around the world to avert the introduction of high trade taxes.
According to Luca Paolini, chief strategist at Pictet Asset Management, the fading economic growth in the USA and in the tax regulations in Europe should help limit the continued transatlantic gap in the stock market performance.
But the momentum probably swung too quickly in favor of Europe at the beginning of the year.
“The truth is probably somewhere in between where the United States is not a paradise and Europe is not the worst place on the planet.”
