European Stocks Close At All-Time High

European stocks have closed at an all-time high as they continue to outpace U.S. equities for the first time in more than a decade.The pan-European STOXX 600 index finished trading on Feb. 17 at 555.42 points, its highest close on record. Pushing the European index to its record high were aerospace and defense stocks that collectively rose 4.6% on expectations for greater defense spending. It was the largest one-day rise in European defense stocks since Russia invaded Ukraine in February 2022.Defense stocks leading the European market higher on Feb. 17 included Britain’s BAE Systems (LON:BA), which rose 8.9%, and German conglomerate Thyssenkrupp (ETR:TKA), which soared 19.8% to its highest level in more than a year. The record close continues a strong start to the year for the STOXX 600 index, which is outpacing the benchmark S&P 500 index as investors rotate capital out of the U.S. So far in 2025, the STOXX 600 index is up 10% versus a 4% increase in the S&P 500.While defense stocks led the current rally, European equities have seen widespread buying this year across sectors such as banking, energy, and food staples.Many analysts continue to promote European equities, saying they are cheap to buy and undervalued compared to U.S. stocks.