U.S. stocks are chipping away at Europe’s outperformance, and Powell slipped in this dovish signal on Fed rates that Wall Street overlooked

Market Performance - U.S. stocks have rebounded significantly, with the S&P 500 up 13% year to date and the Nasdaq up 17% [2] - The DAX index in Germany is up 19% this year, while the FTSE 100 in the U.K. is up 13% [2] - Hong Kong's Hang Seng Index has surged 32% this year, indicating a strong performance compared to European markets [3] Investor Sentiment - Investor sentiment towards Europe has shifted negatively due to concerns about deficit outlooks in the U.K. and France, alongside subdued economic growth [3] - Analysts at Deutsche Bank express frustration over the lack of progress in government spending in Germany, which has raised concerns about long-term growth implications [4] U.S. Market Drivers - U.S. markets are benefiting from optimism surrounding the AI revolution, robust corporate earnings, and continued GDP growth, alongside tax cuts and the Federal Reserve's easing policies [5] - The Federal Reserve's recent rate cut is viewed as a "risk-management cut," indicating a cautious approach rather than the beginning of an aggressive easing cycle [6]