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European markets are experiencing a resurgence, thanks in part to the policies of Donald Trump. Since the US election in November, the S&P 500 has surged by 6 per cent, reflecting investor confidence in the president’s agenda of deregulation and tax cuts. However, European markets have also seen significant gains, with the Euro Stoxx 600 index matching the performance of its US counterpart. Stocks in Germany have soared by nearly 14 per cent, reaching record highs.
One factor contributing to this market rally is the absence of trade tariffs on Europe by the Trump administration. While the president has focused on imposing tariffs on other countries, such as Mexico and China, Europe has remained relatively unscathed. This has allowed fund managers to shift their investments from US stocks to European equities, marking the largest such move in at least 25 years.
Additionally, the value of the euro and other European currencies relative to the dollar has helped boost European exports. The European Central Bank’s rate-cutting measures have further supported market sentiment, while the lack of major tech stocks in Europe has become a potential advantage following developments in artificial intelligence.
Overall, the global economic landscape is evolving, with Europe and other regions poised to challenge traditional notions of American exceptionalism. As trade dynamics continue to shift, it remains to be seen how different economies will adapt and compete in the tech race.
katie.martin@ft.com