European Earnings Defy Gloomy Predictions, Fueling Stocks Rally

European third-quarter earnings have exceeded expectations across the board, supporting stocks at record highs and boosting sentiment on the outlook for 2026.

With the reporting season nearly over, earnings-per-share growth for the MSCI Europe Index is running at 5.7%, compared with expectations for no increase at all, data compiled by Bloomberg Intelligence shows. Almost half of companies have topped earnings estimates, prompting more guidance upgrades than downgrades and defying fears around tariff turmoil and currency headwinds.

“The earnings season continues to deliver,” said Goldman Sachs Group Inc. strategists led by Guillaume Jaisson. “Guidance has largely been confirmed. As ...