BlackRock, the world’s largest asset manager, has said that recently European listed company stocks have become less attractive to investors. The rise in energy prices plays a role, particularly affecting Europe due to its dependence on imports, but also the loss of the valuation advantage compared to US companies.
WHAT HELEN JEWELL OF BLACKROCK THINKS ABOUT EUROPE
Helen Jewell, head of international fundamental equity investments at BlackRock, told the Financial Times that “it is difficult to be as optimistic about Europe as we were before.” “You can’t make these big statements that Europe looks cheap now,” she added. “A year ago there was this really interesting valuation gap, which has now “closed, and from an energy perspective, Europe is simply much more exposed… so we need to be a bit more selective about where we see opportunities.”
THE COMPARISON WITH THE UNITED STATES
For years European equity stocks have delivered lower returns than US ones. Since the beginning of 2026, however, they have still managed to capture investors’ interest, who were looking for alternatives to the very expensive stocks of American tech companies. Thus, European equity funds recorded record inflows and the results of the first two months of the year were excellent.
The war with Iran, however, changed everything: stocks in the Old Continent collapsed and – as reported by the Financial Times – the Stoxx Europe 600 index lost almost 12 percent compared to levels before the conflict in the Persian Gulf, hitting a low in March. In contrast, the New York Stock Exchange’s S&P 500 index lost only up to 8 percent and has already recovered, reaching new all-time highs.
Today the Stoxx Europe 600 index – which gathers the six hundred largest listed companies in Europe by market capitalization – is down over 1 percent. The S&P 500 index, instead, is up 1.2 percent.
WHAT WAS EXPECTED FROM EUROPE, AND WHAT HAPPENED
Jewell explained that BlackRock’s optimism about the European stock market at the beginning of the year was partly due to forecasts of a “widening” of returns from high-growth sectors – such as banking and defense – to other sectors. This widening, however, has “narrowed” because of the war in the Middle East.
BlackRock expected a recovery, particularly in the healthcare, luxury, and industrial sectors, which last year had been affected by US import tariffs but this year should have recovered thanks to both the strengthening of the euro and the easing of tariff pressure. However, this did not happen: rising energy prices have eroded the performance of these sectors, along with rising financing costs and reduced consumer spending. “We are very concerned about consumers,” Jewell said, who are “under pressure because of interest rates and inflation” and consequently “will start to think carefully about how they spend.”
The BlackRock executive added that “at the moment, global funds see more interesting opportunities for US companies,” also because the United States is less exposed to the international energy shock, being the world’s largest producers of oil and natural gas.
AND NOW?
BlackRock is not the only investment management company to have reservations about Europe. According to Epfr data, capital flows to European equity funds have plummeted since the start of the war with Iran; in contrast, US stocks have received more net inflows in April than in any other month of 2026 so far.
“The war only reminds us that Europe is vulnerable and that, in every area, it merely follows market trends,” explained Emmanuel Cau, analyst at Barclays: the bank – headquartered in the United Kingdom – recently recommended clients to focus on US stocks rather than European ones. According to Cau, the situation could still improve if the crisis in the Persian Gulf pushes European governments to increase investment spending.
