# European earnings momentum builds after technology-led market advance

- Link: https://www.directorstalkinterviews.com/european-earnings-momentum-builds-after-technology-led-market-advance/4121256330
- Published: 2026-07-14T10:00:00+01:00
- Author: Amilia Stone

European equity markets are entering the second half of 2026 with a stronger earnings
backdrop and broader signs of corporate momentum. A technology-led advance during
the second quarter lifted valuations across the region, while expectations for the
strongest profit growth in several years have created a more constructive setting
for the coming reporting season.

The Morningstar Europe Index gained more than 10% in dollar terms during the second
quarter, recording its strongest quarterly rise since late 2020. Although gains 
in the United States and Asia were larger, Europe’s performance reflected renewed
interest in companies positioned to benefit from artificial intelligence, digital
infrastructure and long-term capital investment.

Europe’s technology sector rose by almost 40% during the quarter as demand strengthened
for semiconductor manufacturers, equipment suppliers and communications businesses
linked to artificial intelligence investment. Infineon Technologies more than doubled,
while ASML advanced by about 45%. Nokia and Siemens also delivered substantial gains,
showing that the opportunity extended beyond chip production into industrial technology
and network infrastructure.

The advance was supported by other major sectors. Financial shares gained close 
to 20%, while industrial companies rose by around 14%. This broader participation
suggests that confidence was not limited to a narrow group of technology businesses.
Banks, manufacturers and infrastructure-related companies also benefited from improving
expectations, helping to create a more balanced regional market.

Performance varied across individual countries. The Netherlands led the major European
markets, supported by the significant weighting of ASML in its domestic index. Italy
and Spain also recorded strong gains, while France and Germany delivered more moderate
progress. These differences largely reflected market composition, with technology,
financial and industrial exposure shaping national performance.

European earnings are expected to grow by about 12% compared with the same period
last year. More favourable analyst revisions have raised the possibility that growth
could reach approximately 14%, which would mark a meaningful improvement after a
prolonged period of limited profit expansion.

_**[JPMorgan European Discovery Trust plc](https://www.directorstalkinterviews.com/company/jpmorgan-european-discovery-trust-plc/jedt.l)**
is an investment trust company. The Investment Trust JEDT objective is to achieve
capital growth from a portfolio of quoted smaller companies in Europe, excluding
the United Kingdom._

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