07-04-2025 15:00
Capital shifts from US to Europe as market confidence in Trump era falters
President Donald Trump’s administration has turned the market landscape upside down. Investors are losing confidence in the US and are now eyeing Europe as a safer, more promising alternative. Perhaps the EU will prove more hospitable than Washington.
According to The Wall Street Journal, Trump’s current tariff policy has triggered the sharpest stock market drop in three years. Experts say the first quarter of 2025 has been the worst for US equities since 2022.
Trade wars initiated by the president, along with his confrontational stance toward former allies, have sent global markets tumbling. Key indices like the S&P 500 and Nasdaq Composite have been in a prolonged decline, with no clear end in sight.
Last month, Bank of America reported a record-breaking capital outflow from US equities. Nearly a quarter of investors reduced their exposure to American assets, citing mounting instability and major shifts in investment strategy.
At the same time, attention is shifting toward Europe. Many market players now see it as a promising frontier. Interest in European equities has reached its highest level since July 2021, and it is still climbing.
Since the start of 2025, the Stoxx Europe 600 index has risen by 6.4%, outperforming the S&P 500 by nearly 10 percentage points. Analysts note that this is the largest gap since 2015. Defense stocks have led the charge. Thus, the market cap of Germany’s Rheinmetall doubled, while France’s Thales jumped 77%.
Meanwhile, tension continues to mount in the US. According to a CNBC survey, more than half (60%) of chief financial officers expect a recession in the second half of 2025, with another 15% forecasting it for 2026.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
Published 07 April 2025
© InstaFintech Group
© InstaFintech Group
