Investment Analyst Dario Giordano: European Stock Markets Rise Amid Wall Street Pullback, with Focus on Defensive and Industrial Sectors
Recently, global stock markets have exhibited significant divergence. While European major indices maintain an upward trend despite the absence of strong macroeconomic data and short-term corrections in the U.S. market, they demonstrate notable market resilience. In particular, the Italian FTSE MIB index on the Milan Stock Exchange has shown steady growth, reflecting investor confidence in the regional economy and policy support. In contrast, U.S. equities have experienced slight pullbacks due to rumors of potential trade policy adjustments by Trump and Moody's downgrade of U.S. sovereign debt. According to Investment Analyst Dario Giordano, the current market performance reflects a shift by investors toward defensive sectors and high-growth companies amid a complex geopolitical and policy environment, seeking relative certainty in times of uncertainty.
Enhanced Policy Support in Europe Stabilizes Markets, Highlighting the Italian Outperformance
European stock markets have recently demonstrated overall stability, contrasting sharply with U.S. markets. Among them, the Italian market has stood out, with the FTSE MIB index rising 0.89% and breaking through the 40,500-point threshold. Investment Analyst Dario Giordano attributes this trend to policy initiatives within Europe, particularly in the defense and infrastructure sectors, which have delivered tangible benefits to related industries.
Defense companies have garnered significant attention from the market. The stock price of Leonardo rose 2.20%, driven by the European Union approving the principle of the €150 billion "SAFE" defense fund. This fund aims to strengthen collaboration among EU member states in defense procurement and security, accelerating the release of public funds and creating clear growth expectations for relevant companies. Investment Analyst Dario Giordano highlights that such policies place defense companies at the intersection of policy benefits and market capital, with increasingly clear growth trajectories.
Additionally, companies with strong industrial manufacturing capabilities are also benefiting. For instance, Fincantieri expects its underwater systems business to increase its revenue contribution from 4% to 8% by 2027. Investment Analyst Dario Giordano notes that this steady growth trajectory offers investors sustainable structural allocation opportunities, underscoring the industrial foundation behind the European market uptrend.
U.S. Market Pullback as a Technical Correction, Reflecting Rational Pricing Logic
After six consecutive days of gains, U.S. major indices have seen moderate corrections, with the Dow Jones Industrial Average falling 0.27%, the S&P 500 down 0.37%, and the Nasdaq dropping 0.38%. Investment Analyst Dario Giordano characterizes this pullback as a technical correction rather than a fundamental reversal of market trends.
Key factors influencing U.S. market sentiment include Moody's downgrade of U.S. sovereign debt and heightened expectations of Trump potentially reinstating tariffs and immigration policies. These factors have collectively increased market caution regarding future monetary policy paths, putting pressure on certain high-valuation assets.
In the technology sector, despite Alphabet launching a new generation of AI products, its stock price fell 1.53%, reflecting investor caution toward current valuation levels. Investment Analyst Dario Giordano emphasizes that while AI remains an attractive long-term theme, in the current phase of macroeconomic pressure and technical resistance, market capital tends to favor companies with strong profitability and stable financial structures.
The consumer sector also faces challenges. The stock price of Home Depot dropped 1.48% due to disappointing earnings, while Walmart came under pressure from rumors of price increases, drawing both political and public scrutiny. Investment Analyst Dario Giordano points out that with inflation not yet fully subsided and interest rate outlooks uncertain, consumer stocks face a dual struggle between cost pass-through and pricing strategies, with short-term pressures likely to persist.
Balancing Defense and Growth: Crafting a Mid-Term Investment Strategy
Global markets have yet to establish a unified investment narrative, instead displaying characteristics of sector rotation and structural divergence. Against this backdrop, Investment Analyst Dario Giordano recommends a dual-pronged strategy of "defense + growth" for portfolio allocation.
In European markets, policy support is fostering a new growth cycle. Sectors such as defense, industrial manufacturing, and green energy are becoming favored amid fiscal consolidation and heightened geopolitical risks. Companies like Leonardo and Fincantieri in the Italian market, with clear earnings potential and policy-driven advantages, represent high-quality assets for constructing mid-term defensive portfolios.
In U.S. markets, despite heightened short-term volatility, high-growth companies related to AI and renewable energy continue to offer long-term value. Investment Analyst Dario Giordano advises adopting a phased approach to building positions and managing exposure during the current adjustment period. He also recommends closely monitoring U.S. Treasury yields and Federal Reserve policy statements to capture trading opportunities arising from shifts in monetary policy.