Barclays: European Stock Rally Pauses, Stress Test Begins for Europe

European equities have stalled after a 10% YTD gain, pressured by rising energy prices, higher rates, and political noise in France and Germany. Barclays notes the AI-driven diversification trade into Europe has faded as US tech recovers, and maintains a neutral stance. The pause signals a shift in relative market performance, with Europe facing a stress test amid macro headwinds.