European stocks have been outperforming their U.S. counterparts since Donald Trump took office in January 2025. The Stoxx Europe 600 index has risen by 5.6%, while the Euro Stoxx 50 gained 6.7% during this period. In contrast, the S&P 500 has increased by 2.5%, the Nasdaq Composite by 2.2%, and the Dow Jones Industrial Average by 2.6%. Year-to-date, the MSCI Europe index is up 10%, and the MSCI All World ex-US index has risen 7%, compared to the S&P 500's 4% gain. Analysts attribute Europe's strong performance to the absence of immediate tariffs on the European Union, optimism surrounding a potential resolution to the Ukraine conflict, and a rebound from a challenging Q4 2024. Meanwhile, U.S. markets have faced uncertainty over Trump’s trade policies and potential inflationary pressures. The Nasdaq, particularly affected by the launch of the Chinese DeepSeek chatbot, has seen muted growth. This divergence marks a shift from recent years, where U.S. markets typically outperformed Europe.