Europe's stock exchanges are overtaking the USA: Trump's policies are causing capital flight!

Europe's stock exchanges are overtaking the USA: Trump's policies are causing capital flight!

The financial markets in Europe have experienced a remarkable rise in 2025 and are overtaking the US markets for the first time in many years. Deutschlandfunk reports that international investors are withdrawing billions of dollars from American markets and shifting them to Europe. This movement is largely triggered by President Trump's erratic policies and the threat of tariff increases.

The main beneficiaries of this capital flight are the stock exchanges in Germany, Spain and Italy, which are recording double-digit price gains. The DAX in particular has gained around 17 percent since the beginning of the year, while its US counterpart, the Dow Jones, has only gained around 0.5 percent. Even the Nasdaq 100 only saw moderate growth over the same period, with an increase of over three percent.

Reasons for the trend

According to observers, a central reason for the decline in interest in US markets is the uncertainty caused by US policy under Trump. High outflows from US funds were particularly observed in April 2025, shortly after announcements of tariff increases. Experts like Ludovic Subran from Allianz describe a clear movement of investor money from the USA to Europe and Japan. This shows that stocks in the USA are considered expensive compared to corporate profits, while European stocks appear cheap.

In addition to capital relocation, there are significant concerns about rising U.S. debt. This has doubled from $18.1 trillion to $35.4 trillion in just ten years. Despite these challenges, the US dollar remains the dominant currency and US assets continue to play a central role in global finance.

Market forecasts

The trends of diversification and a return to European stocks could continue in the second half of 2025, according to market observers. Fund managers have moved from an overweight to an underweight in the US, indicating continued uncertainty and a search for more stable investment alternatives. daily news highlights that this development is of great benefit to European markets and could continue to provide a boost to the DAX and other European indices.