EURO STOXX 50 Surges 2.04% Over the Past Week Amid Global Optimism and Strong Earnings

Over the past week ending on May 16, 2025, the EURO STOXX 50 index climbed by an impressive 2.04%, closing at 5,427.53 points. This rally reflects a boost in investor confidence, driven by a combination of positive global developments and strong European corporate earnings.

Key Drivers of the Weekly Gain

1. Easing U.S.-China Trade Tensions

On May 12, the United States and China surprised markets by announcing a 90-day mutual tariff reduction agreement. The U.S. lowered tariffs from 145% to 30%, and China responded by cutting its own from 125% to 10%.
This unexpected move significantly reduced fears of a global recession and sparked a rally across global equities, including a 1% jump in the broader STOXX 600 index. Investors welcomed the renewed sense of cooperation between the world’s two largest economies, which had been under prolonged trade strain.

2. Softer U.S. Inflation Data

Inflation data released in the U.S. for April came in lower than expected, triggering a drop in bond yields and a weakening of the U.S. dollar. This data lowered pressure on the Federal Reserve to continue its rate-hiking path, boosting investor sentiment worldwide — particularly in interest-rate-sensitive European equities.

3. Robust European Corporate Earnings

More than 60% of STOXX 600 companies have now reported earnings that beat analyst expectations. Corporate profits are now projected to grow by 1.9% for the quarter, up from the earlier estimate of just 0.4%.
These stronger-than-anticipated results have reassured investors about the health of the European economy and helped fuel the gains seen in the EURO STOXX 50.

4. Outperformance in Healthcare and Luxury Sectors

Key sectors such as healthcare and luxury goods saw notable gains. Healthcare giants like Novo Nordisk and Novartis rose by around 1.7%, while luxury conglomerate Richemont surged 6.5% after delivering strong quarterly results.
These sector-specific rallies helped propel the index higher despite minor pullbacks in other areas.

Daily Market Movements

• May 14: The index slipped 0.24% to 5,403.44, largely due to declines in energy and mining stocks. This came in response to falling oil and metal prices.
• May 15: A modest recovery pushed the index up by 0.16% to 5,412.08 as markets stabilized.
• May 16: The week concluded with strong buying interest, closing at 5,427.53 — a full 2.04% increase over five days.

Forward Outlook: Momentum vs. Caution

Despite the recent upswing, many analysts remain cautiously optimistic. A Reuters survey revealed that about 54% of investors expect a market correction of 10% or more in the next three months, citing risks related to slowing global growth and geopolitical uncertainty.
Still, long-term projections remain bullish. As earnings continue to surprise to the upside and inflation shows signs of moderating, the European equity market could maintain its upward momentum.

Summary

The EURO STOXX 50 had a strong week, gaining 2.04% thanks to a blend of macroeconomic improvements and strong corporate earnings. The easing of U.S.-China trade tensions, lower-than-expected U.S. inflation, and solid performance in key European sectors supported the bullish sentiment.
While short-term volatility remains a possibility, especially amid global uncertainties, the medium- to long-term fundamentals appear supportive of continued growth in European markets.