European stocks have shown a robust performance, rising over 10% since the beginning of the year, contrary to the prevailing notion of decline and overregulation. Factors contributing to this growth include attractive valuations, proactive interest rate cuts by the Federal Reserve, easing geopolitical risks, and enhanced shareholder returns. The optimism surrounding a potential peace deal in Ukraine has further boosted market sentiment, leading analysts at Goldman Sachs to upgrade their forecasts for European stocks, including a lift in the STOXX 600 target. Despite a sluggish Euro area GDP growth of just 0.1% in 2024, European stocks are experiencing their best start to the year since 2000, driven largely by significant re-ratings of European banks as interest rates have been reduced. Market analysts suggest that the current rally may be overheating, indicating a possible pause in the upward momentum as investors reassess their expectations regarding the ceasefire in Ukraine.