Europe’s STOXX 600 reached a record all-time high of 630.56 points on Friday, February 20, 2026. The index climbed 0.84% during the session, marking its fourth consecutive weekly gain. This rally pushed the year-to-date performance beyond 5%, significantly outperforming the U.S. S&P 500. The primary catalyst for the surge was a landmark 6-3 ruling by the U.S. Supreme Court. The court struck down President Trump’s sweeping global tariffs, declaring they lacked authorization under the International Emergency Economic Powers Act of 1977. Investors responded with relief as the decision eased trade uncertainty that had weighed on European exporters. Economic data from the Eurozone provided additional momentum. The Flash Composite PMI rose to 51.9 in February, signaling the 14th consecutive month of expansion. Most notably, the manufacturing sector returned to growth territory with a PMI of 50.8, up from 49.5 in January. This represents only the second time the sector has expanded in over three years. Luxury and automotive stocks led the gains following the tariff ruling. Shares of Porsche rose 2%, while BMW and Mercedes also saw significant increases as the threat of 15% export duties diminished. In the luxury space, Moncler surged 13.4% after reporting strong fourth-quarter sales figures. Banking and insurance sectors also performed strongly. The banking index rose over 2%, rebounding from previous volatility. Italy’s Unipol climbed 8.7% after announcing a 36.8% jump in full-year earnings. Analysts noted that resilient profitability and solid capital buffers are supporting a "risk-on" sentiment across the continent. Major regional benchmarks echoed the positive trend. Germany’s DAX gained 0.87% to reach 25,260.69, while France’s CAC 40 outperformed with a 1.39% increase to 8,515.49. The UK’s FTSE 100 also advanced 0.56% to close at 10,686.89. Despite the record highs, some strategists remain cautious. While the court ruling provides a $175 billion potential refund for importers, the Trump administration has signaled it may seek alternative legal avenues to maintain trade restrictions. Furthermore, the STOXX 600 is currently trading at approximately 16 times forward earnings, which is high compared to the 20-year average of 13.3. Inflation and monetary policy stay central to the outlook. The European Central Bank has held rates steady since June 2025, and current data suggests it may maintain this stance for the remainder of the year. While manufacturing shows signs of a turning point, the services sector continues to expand at a more moderate pace of 51.8.