European stocks rallied after Germany announced hundreds of billion of euros in defense and infrastructure investment, with hopes the Trump administration may walk back some tariffs providing a further boost.
European stocks rebounded due to Germany's planned investments in defense and infrastructure, China's growth targets, and potential easing of US tariffs. Germany's DAX Index led gains, driven by Chancellor-elect Merz's fiscal expansion plans. Stocks sensitive to economic cycles and defense saw significant increases. Potential tariff relief for Mexican and Canadian goods also boosted certain sectors.
