European Stocks Face Worst Underperformance in 30 Years Amid Economic Strain

European stocks are experiencing their worst underperformance relative to the S&P 500 in nearly 30 years, with the U.S. index up over 25% while the Stoxx 600 has gained only 5%.

This widening gap comes despite past struggles in European markets but marks the largest margin since 1995. On November 12, the Stoxx 600 dropped 2%, led by a 4% loss in mining stocks.

Major European indices, including the CAC 40, FTSE 100, and DAX, also saw declines, with Germany’s Aurubis leading the losses.

Germany, in particular, is facing severe economic strain, with the industrial sector suffering its worst slump since the 2009 financial crisis.

Over 41% of German companies had a lack of orders in October, especially in automotive and chemical sectors. The economic pressure is worsened by Trump’s victory, with some analysts predicting worsening U.S.-Germany relations.

READ MORE:

U.S. Inflation Clouds Fed’s 2025 Rate-Cut Path: Is a Slowdown Ahead?

Looking ahead, the European market may face more challenges due to Trump’s proposed tariff hikes, which could further hurt the region, especially amid ongoing U.S.-China trade tensions. Analysts forecast Europe will continue to lag behind the U.S. in 2024, with the impact of these global trade disputes weighing heavily on its economy.

Kosta Gushterov