Earnings Fuel European Stocks, Breaking Records
European stocks continued their positive trend on Wednesday (February 18th), setting another record, driven by a solid earnings season and a shift in investor interest toward European assets. In the latest trading session, the Stoxx Europe 600 closed up around +0.8% at 626.36 points.
Today's gains were led by sectors sensitive to the economic cycle, with defense and banking among the most prominent. At the issuer level, BAE Systems also boosted sentiment after releasing strong results and prospects, while several other stocks moved sharply in reaction to earnings reports.
Year-to-date, the Stoxx 600 has risen around +5.47% (YTD) according to official STOXX data, confirming Europe's continued attractive performance amid valuation concerns and volatility in the US technology sector.
In the United States, index movements tended to be more limited following the latest update. The S&P 500 was seen rising around +0.10% during the same period, reflecting a more moderate rise compared to Europe.
Investor allocation rotation is also increasingly visible. A number of fund managers have stated that they are reducing their portion of US stocks and increasing their holdings in European stocks, believing that Europe offers a combination of relatively cheaper valuations and more stable growth—especially as the "AI shock" narrative continues to make the US market volatile.
Going forward, the direction of the European market will continue to be heavily influenced by two factors: the continued quality of earnings and central bank (ECB) policy. As long as earnings reports continue to "lift" expectations for 2026, the rotation trend to Europe has the potential to continue—although per-share volatility remains high below the index's surface.
Source: Newsmaker.id
