European stock markets are expected to lead the S&P 500 index by the largest margin since April 2025 this week, as investors withdraw from artificial intelligence trading and some positive corporate earnings reports boost the performance of stock markets in the region.

The Stoxx Europe 600 index closed up 0.7% on Friday, with food and beverage stocks and automotive stocks leading the gains. Healthcare stocks performed the worst.

On Friday, market expectations for the Federal Reserve's interest rate hike this month cooled down, which also boosted overall market sentiment. During his speech at the annual meeting of the International Monetary Fund held in Bangkok, Federal Reserve Chairman Kevin Warsh did not mention monetary policy or express his views on the economic outlook for the United States. Investors reduced their bets on a rate hike by the Federal Reserve at its policy meeting on October 27-28.

European stock markets rose 2.1% this week. Amidst increased volatility in sectors related to artificial intelligence, investors turned to defensive sectors, providing support for the stock market. In addition to corporate earnings reports, investors are still concerned about high energy prices caused by the Iran war, as well as the prospects for central bank policies.

MPPM Trading Director Guillermo Hernandez Sampere stated: "Despite the pressures brought about by geopolitical risks and rising inflation, economic data from the eurozone is still providing support for the market. At the same time, the market is also watching the bond market, as yields in some eurozone countries may continue to climb, putting further pressure on the euro and the European Central Bank."

In terms of individual stocks, Nordex SE, a manufacturer of wind turbines, reported third-quarter results that far exceeded expectations and raised its annual profit margin target, resulting in a 12% surge in its stock price.

The stock price of Deutsche Commerzbank rose by 0.5%. Union Bank’s increase in its shares in the bank was approved by the European Central Bank, paving the way for CEO Andrea Orcel to acquire this German bank.

Reports suggest that British Chancellor of the Exchequer John Hilley will raise bank taxes in this month's budget, which has led to a decline in some British bank stocks. The shares of National Westminster Bank and Lloyds Bank both fell by about 1%.

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Responsible Editor: Chen Yujia