European stocks are losing momentum as investors pivot from cheap regional equities to the AI trade and worry about a global energy shock. The Stoxx Europe 600 has fallen behind the US and Asia because Europe’s economy is exposed to inflation and supply-chain disruptions from the Middle East conflict, and because its benchmarks contain too little AI-heavy exposure. Even with earnings growth expected, forecasts may be cut as energy hits and higher European borrowing costs threaten growth.
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