Wall Street Predicts Growth of European Stocks by the End of 2025

Some of the leading strategists from Wall Street say that European stocks are likely to rise in the coming months, as strong economic expectations help stocks break out of a narrow trading range, Bloomberg reports.

Market forecasts from the Goldman Sachs group predict that the Stoxx Europe 600 index will increase by two percent by the end of 2025, reaching around 560 points, driven by better growth prospects, low exposure, and relatively favorable valuations.

The team led by Sharon Bell also highlighted the ‘growing desire of investors to diversify beyond U.S. investments, both due to dollar weakness and concentrated positions in the tech sector.’ Strategists expect the benchmark index to rise five percent over the next year.

Bell accurately predicted in May that European stocks would not replicate the strong performance of the first quarter. The index is struggling to break through record levels reached in March, while U.S. tariffs and weak corporate results keep investors on the sidelines. The Stoxx 600 rose by 8.7 percent in 2025, slightly less than the S&P 500, which advanced by 9.8 percent.

JPMorgan Chase & Co. strategist, Mislav Matejka, accurately predicted the consolidation in July. In a note published on Monday, he stated that the loss of momentum is ‘healthy’ and that sentiment at the beginning of the year was too optimistic.

– The time to buy is approaching – he wrote, referring to the recent recovery of Chinese stocks. The world’s second-largest economy is a key market for European mining companies, car manufacturers, and luxury goods. The strategist also sees the possibility that eurozone stocks may outperform U.S. stocks in the next month or two, although he warned of persistent risks due to the weakening U.S. labor market and political turmoil in France.

The CAC 40 index underperformed last week after French Prime Minister François Bayrou called for a confidence vote due to budget conflicts. A Bloomberg survey of 17 strategists last month showed that they expect, on average, the Stoxx 600 to end the year at around 556 points.