Record start to 2026 for Europe. The STOXX index has already broken records

The STOXX Europe 600 index, which includes companies ranging from large to small capitalization, had been approaching the 600-point level for some time. This milestone was surpassed on Monday, January 5, 2026, shortly before the European market close. It did not take long for the next trading day of the new year to bring a new record above 605 points. Although the index slightly retreated from its highs, it maintained its position and closed the trading day on January 7, 2026, at 604.99 points. This represents a continuation of the growth seen in 2025, when the index rose by more than 17%. Last year, the index recorded a more significant correction only in April. Over the past five years, this represents a value increase of 47%.*

Source: Google Finance*

Records in Europe

A similar development was also recorded by other major benchmarks in Europe, which reached their own records at the beginning of January. The most notable is the performance of the German DAX index, which surpassed the symbolic threshold of 25,000 points and during trading on January 7, 2026, rose as high as 25,122. The UK’s FTSE index, also above the psychological level of 10,000 points, together with other indices such as the French CAC, Spanish IBEX, and the pan-European STOXX 50, retreated from their highs on the same day, which they had reached the day before. Despite this development, all benchmarks, including the DAX, remained in positive territory from a long-term perspective.*

https://www.google.com/finance/quote/DAX:INDEXDB?window=5Y

https://www.google.com/finance/quote/UKX:INDEXFTSE?window=5Y

https://www.google.com/finance/quote/PX1:INDEXEURO?window=5Y

https://www.google.com/finance/quote/I:INDEXBME?window=5Y

https://www.google.com/finance/quote/SX5E:INDEXSTOXX?window=5Y

Development of prices of the DAX, FTSE, CAC, IBEX, and STOXX 50 indices over the past five years. Source: Google Finance*

Problems in the US, possibly also in Europe?

The positive performance of European markets was supported by geopolitical turbulence in Latin America. During the first January weekend, U.S. armed forces attacked Venezuela and captured its president, Nicolas Maduro, along with his wife. They are accused of drug trafficking, allegedly using funds from oil sales, which had already begun to escalate tensions toward the end of last year. The situation particularly benefited shares of defence-sector companies, which posted strong gains. U.S. President Donald Trump stated that the country would fall under U.S. “administration,” a statement later softened by the Secretary of State, who told CNBC that the aim was merely to achieve political objectives. Stock market gains were further supported by reports that Trump was once again laying claim to the territory of Greenland. In response, a White House spokesperson told CNBC that the U.S. is considering various options to acquire the Danish territory, including the use of the military. Denmark responded immediately, announcing plans to begin arming Greenland, while at the same time expressing hope for successful cooperation with the United States.

Interest in Europe

Notably, the market’s upward movement was not significantly influenced by any major news. This may indicate that investors are turning toward European equities because they find them attractive and are increasingly gaining confidence in this market. Another important factor is that the U.S. market—particularly the technology sector—is overvalued due to artificial intelligence. European technologies, by contrast, are highly competitive, and the valuation of individual stocks is often lower. It should also be noted that inflation declined last year and the ECB cut interest rates several times. In addition, it expects the eurozone to grow in the new year from the original 1% to 1.2%.

Confidence in continued growth

Growth in the eurozone is also expected by Goldman Sachs, whose forecasts point to a recovery driven by lower inflation, higher consumer spending, and low unemployment. According to the bank, growth should be supported by increased defence spending, which has been discussed since last year. Fiscal stimulus directed toward defence and subsidies is also expected to come from one of Europe’s largest economies, Germany. In its report, the bank also mentions the reduced impact of tariff policy, as historical data show that declines in U.S. exports were offset by exports to other parts of the world. However, the bank warns that although it expects growth, its potential is lower and risks from China persist, particularly its exports, which disrupt competition on the Old Continent. Based on these outlooks, Goldman Sachs revised its growth forecast for the STOXX 600 index, now expecting it to rise to 625 points from the previous 615 points. [1]

*Past performance is not a guarantee of future results.*

[1] Forward-looking statements are based on assumptions and current expectations that may be inaccurate, or on the current economic environment, which may change. Such statements are not a guarantee of future performance. They involve risks and other uncertainties that are difficult to predict. Actual results may differ materially from those expressed or implied in any forward-looking statements.