European Stocks Seen Rising Modestly to Record High in 2026

A Reuters poll found that European shares are expected to rise modestly by the end of 2026, with the STOXX 600 index forecast to end the year at 670 points, up about 2% from current levels. This would mark a record high for the benchmark and lift its gain for the year to more than 13%, following an almost 17% rise in 2025.

The strong corporate earnings delivered by European companies in the second quarter are seen as a major driver of this optimism, with earnings rising 24.1% from a year earlier, according to LSEG I/B/E/S data. This is the strongest quarterly growth since the third quarter of 2022.

However, despite these positive expectations, investors face several risks, including tighter European Central Bank policy and the threat of further energy supply disruptions linked to conflicts in the Middle East and Ukraine.