Europe's Stocks Defy Global Shocks with Strong Earnings Growth

European stocks have defied global shocks and demonstrated strong earnings growth in the first half of 2026, according to Goldman Sachs Research. Despite a renewed energy supply shock, companies in the STOXX Europe 600 index grew their earnings-per-share by an estimated 14% over the same period.

The prevailing narrative that Europe is struggling with weak profit growth is at odds with the data, says Sharon Bell, senior European equity strategist for Goldman Sachs Research. 'The first half earnings-per-share growth is tracking at the strongest pace in three years,' she writes.

Foreign investors drove the strong inflows into European equities, with many seeking to diversify their portfolios. The STOXX Europe 600 index has returned 54% since January 2025 compared to 34% by the S&P 500 index.