Alpha Rho Research

Alpha Rho Research

Research

European Equity Rally

Europe's Victory Lap—And Why It Probably Ends Here

Manuel Ritsch's avatar
Manuel Ritsch
Feb 27, 2026
∙ Paid

Executive Summary

MSCI Europe has outperformed the S&P 500 by 7.79 percentage points over the trailing 12 months (USD terms)—the most sustained European leadership since the dot-com unwind. Trump’s tariff regime and European defense spending commitments triggered the rotation, driving a 10.7% P/E re-rating in European equities while US multiples compress…

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