Since Donald Trump's election victory, European markets have surged by 12%, significantly outperforming the S&P 500's 3.5% gain. This unexpected trend has led investors to reassess European assets, which were previously viewed as struggling. Analysts suggest that the rise in the European Stoxx 50 index is partly due to a shift towards undervalued 'value' stocks as investors seek diversification from the high valuations of major U.S. tech companies. However, concerns are growing regarding the impact of Trump's policies, particularly his proposed tariffs on Canada and Mexico, which have begun to create investor pessimism. The bond market is also reacting, with falling Treasury yields indicating worries about slowing U.S. growth and potential economic weakness. As funds flow into safer government bonds, the assumption that Trump's policies would bolster U.S. stocks and the dollar is being increasingly tested.