Marketwatch reports, citing data from Deutsche Bank, that for the first time in a quarter of a century, European stocks have shown better growth dynamics than American stocks.
Since the beginning of 2025, the Stoxx Europe 600 index has added 3%, while the US S&P 500 has lost 2%. The outperformance of Europe over the United States was last recorded in 2000 when the difference in returns exceeded 10%.
The success of European stocks is due to a change in investor sentiment. Since the beginning of the war in Ukraine in February 2022 and until November 2024, the gap in the P/E ratio between the United States and Europe has increased by 4.5 points, the publication writes.
After Donald Trump’s victory in the US election, the gap narrowed by 2.7 points. This was due to political instability in the United States, a drop in the value of the G7 stocks, and hopes for a truce in Ukraine.
The situation in the US is developing differently. While institutional investors are leaving the market en masse, the Financial Times reports that private traders are actively investing in stocks.
According to VandaTrack, in 2025, retail investors invested $67 billion in US stocks and ETFs, down slightly from $71 billion in the last quarter of 2024. At the same time, Bank of America noted a record decline in investments by large players in March 2025.
“Buying on a downturn has been a nearly win-win strategy four years out of five,” said Steve Sosnik, chief strategist at Interactive Brokers. Private investors continue to believe in the market despite the turbulence.
Trump’s tariff policy remains a key driver of volatility. The president is expected to announce new tariffs on April 2. Although US officials have hinted at a softer approach than the harsh measures promised by Trump, markets still fear the consequences.
The recent 1.8% rise in the leading benchmark S&P 500 on the day is linked to hopes that these plans will be revised.