While trade tensions continue to buffet U.S. markets, Europe’s stock exchanges have taken the global lead, with eight of the world’s 10 top-performing bourses now located on the continent. Germany’s DAX, in particular, has soared more than 30% in dollar terms so far this year. Investors point to Europe’s robust fiscal plans, stable inflation, and relative political calm as catalysts driving the rally. The broader Stoxx 600 index has outpaced the S&P 500 by a record 18 percentage points in dollar terms—a remarkable reversal for a region long seen as economically sluggish. Peripheral markets such as Hungary, Slovenia, and Greece are joining core economies in delivering outsized returns. Behind the surge: Berlin’s once-frugal government has proposed hundreds of billions of euros in spending for infrastructure and defense, a move that is expected to ignite growth across the eurozone by late 2026. Meanwhile, corporate earnings across MSCI Europe rose over 5% in the first quarter—de...