European Stocks Forecasted for 11% Gain in 2026: Reuters Poll Analysis

The Reuters poll [1] projects the STOXX600 index will reach623 points by end-2026 (an ~11% gain), supported by lower valuations (MSCI Europe P/E:14.8x vs S&P500:22.9x [2]) and Germany’s infrastructure/defense spending [1]. Short-term trends (Nov3-25) show modest declines: STOXX600 (-0.69%), DAX (-2.19%), CAC40 (-1.15%) [0], but the poll’s positive outlook may reverse this. European stocks also benefit from lower exposure to the AI bubble [1], making them a relative hedge.

Cross-domain correlations include: (1) Valuation gaps as a long-term driver of capital flows to Europe; (2) European equities as a hedge against AI bubble risks; (3) Mixed investor sentiment (UK fund redemptions [4] vs positive poll forecasts). Deeper implications: The forecast aligns with expectations of converging growth between Europe and the U.S.

: Valuation arbitrage and economic recovery-driven gains. : Failure of economic improvement, ECB policy delays [3], geopolitical tensions, and AI bubble burst spillover [1]. Investors should monitor ECB rate decisions and Eurozone GDP growth closely.

Forecasted gains: STOXX600 (~11%), DAX (9.7%), CAC40 (8%). Valuation metrics: MSCI Europe 14.8x forward P/E [2]. Short-term trends: Nov3-25 declines [0]. Risk factors: Unmet economic projections, policy delays, and geopolitical tensions. This summary provides objective context for decision-making without investment recommendations.