Europe’s markets show strength in 2025?

The start of 2025 has seen good competition between U.S. and European stocks. Markets across the EU have lagged for a long time, but are now seeing a return to market value. Over the last two months, major European indices (CAC 40, DAX 40 and Stoxx Europe 600) gained all the way up to 12%, while major American indices like the S&P 500 and Nasdaq posted modest gains of less than 3%.

European markets, in contrast to the U.S., seem to offer more potential and growth potential for investors. This indicates an upending of the prevailing global investment order.

European stocks have spent years playing catch-up to Silicon Valley’s tech companies, though at the start of 2025, as the tech giants’ performance waned, large European companies started posting results that surpassed expectations.

In addition, the impact of Donald Trump’s perceived trade policies focused investors’ gaze on European markets.

Investor interest in the European defence sector remains strong due to escalating geopolitical risks, with upcoming polls in Germany also described as a potential market catalyst. To discover financial trends in international markets, customized filtering systems may help to introduce a systematic structure in the analysis system of investors. Stock screener also helps in keeping track of investment strategies as you save stock screening criteria.

Such a backdrop has experts increasingly seeing European stocks as a potentially attractive alternative to the U.S. market. Deutsche Bank, for example, is looking for European companies to maintain strong earnings surprises, drawing more attention toward the region. Overall, however, most big investors still perceive the U.S. as the main event for the long haul.

That said, even the cautious Barclays and Pictet AM have had no hesitation in admitting something is brewing in Europe. Not all sectors are doing equally well, they warn—some industries are having a boom, others are left behind. But here’s the kicker: A recent Bank of America survey found that, for the first time in years, investors prefer the EuroStoxx 50 to the Nasdaq, a sign that attitudes may finally be changing.

To sum up, the European markets aren’t going to dethrone the U.S. overnight. But they’re no longer merely the underdog. If earnings remain robust and global jitters continue sending investors scrambling for diversification, this could herald a larger trend. For now, at least, the U.S. remains the headliner—but the audience is beginning to look sideways.