European stock markets hit record highs, with the Stoxx 600 index breaking through August highs.

on Nov. 5, European stock markets broke through previous closing historic highs, continuing a recent streak of outperforming global markets. This rally was primarily driven by investors shifting from AI trading into defensive sectors, supported by a strong earnings season. The Euro Stoxx 600 index climbed 0.5%, breaking through earlier highs set in August, with mining and consumer stocks leading the advance. Earlier, clearer results from the U.S. midterm elections triggered a broad rebound in risk appetite, pushing the index sharply higher on Wednesday as well.

Additionally, international oil prices retreating below $100 per barrel have also underpinned European equities. Since early October, the pan-European benchmark index has outperformed the MSCI All Country World Index and is poised to post its strongest quarterly relative performance since Q1 2025. As the AI trading fervor subsides, investors are rotating into defensive sectors such as healthcare and consumer staples, allowing European markets to benefit. Market attention will now pivot to how the outcomes of the U.S. midterm elections may affect the Iran war and tariff policies, as well as whether shifts in U.S. policy could stimulate the renewable energy sector while potentially weighing on AI trading.