STOXX 600 Record Close: DAX Up 1.2% on Earnings

The STOXX 600 closed at a record 663.05 as the DAX rose 1.2%, with strong earnings and easing Mideast tensions lifting European equities.

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Europe's STOXX 600 closed at a record high of 663.05 on Wednesday, Nov. 11, rising 0.72%, while Germany's DAX gained 1.2% to 26,662.77, also a record close. Strong third-quarter earnings and easing tension in the Middle East drove the advance, and the pan-European benchmark extended to another record on Thursday, adding 0.4%. For investors tracking equity markets today, the move marks Europe's continued outperformance of Wall Street in the fourth quarter.

What Happened in European Markets?

European stocks rallied broadly on Wednesday, led by energy, which rose 2.65%, and technology, which gained 2.45%. Both sectors reversed recent weakness.

Siemens Energy (ENR) jumped 10.8% after raising its margin outlook and expanding its dividend plans. Schneider Electric rose 3% and Legrand added 2.2%, both lifted by demand tied to data-center buildouts. In semiconductors, Soitec climbed 11.9% and Aixtron gained 8%.

Defense shares were the main laggard. Czechoslovak Group (CSG) fell 21.6%. Retail and food and beverage names also trailed the market.

On Thursday the rally narrowed toward industrials and healthcare. The DAX rose 1.1%, France's CAC 40 gained 0.6% and London's FTSE 100 advanced 0.3%. Siemens (SIE) rose 3.8% after lifting its medium-term revenue growth target to 7%-11% from 6%-9%. Drugmaker Merck (MRK) gained 1.6% after raising its 2026 profit guidance for the third time this year.

Why Did the STOXX 600 Reach a Record High?

Earnings are the main driver: STOXX 600 companies are on track to post quarterly profit growth of 25%, the strongest in four years, on LSEG-compiled figures. Energy producers account for a large share of the improvement, and a run of upgraded guidance from industrial and healthcare groups has reinforced it.

Lower energy costs were the second factor. Brent crude fell about 0.9% on Thursday to below $100 a barrel after the United States signaled that no imminent attacks on Iran were likely. Oil had rebounded on Wednesday after an attack on shipping in the Strait of Hormuz, which carries roughly a fifth of global oil supply. Europe imports most of its crude and gas, so a lower oil price directly reduces input costs for industry and eases pressure on inflation.

The AI trade added a third channel. CoreWeave (CRWV) said adjusted profitability is expected in the first half of 2028, which supported demand for the electrical and power-equipment suppliers that serve data centers. By Thursday, European chip and software shares had given back part of their gains amid uncertainty over the leadership at Nvidia (NVDA). Investors rotated toward sectors with earnings visibility and less AI concentration.

How Does Europe Compare With Wall Street?

Europe has outperformed in the fourth quarter. The STOXX 600 is up 4.7% in the period, while the S&P 500 is down 0.4%. The region's lower weighting in AI-linked megacaps has been an advantage as traders reassess valuations in that segment.

U.S. markets face a different set of pressures. Higher-than-expected U.S. inflation and hawkish commentary from Federal Reserve officials have weighed on sentiment there. Rate expectations on the two sides of the Atlantic are therefore diverging, which supports the case for European cyclical and industrial stocks.

Geopolitical Dimension

Oil remains the main channel through which Middle East developments reach European equities. Shipping disruption in the Strait of Hormuz lifts freight and insurance costs and pushes Brent higher. Any de-escalation reverses that effect. The latest U.S. signal reduced the near-term risk premium, though crude near $100 a barrel is still well above levels that would materially ease cost pressure on European manufacturers.

The defense sector illustrates the other side of the trade. Its sharp drop on Wednesday, led by CSG, shows investors reducing exposure to the group as tension eases.

What Comes Next for European Equities?

The next test for European equities is whether earnings momentum holds as the reporting season ends and whether oil stays below $100. A renewed shipping incident or a breakdown in U.S.-Iran contacts would reverse the energy relief quickly. A further drop in crude would extend support for industrial and consumer sectors.

Rotation risk also remains. If AI-linked shares in the United States and Asia stabilize, some of the recent flow into European stocks could reverse. The strength of third-quarter earnings, with 25% profit growth, gives the benchmark a fundamental base that earlier record highs lacked.

Outlook

The STOXX 600 and DAX both ended the week at record levels, supported by the fastest profit growth in four years and a fall in oil below $100 a barrel. Energy prices, Middle East shipping security and the direction of AI-related shares are the main variables over the next three months.