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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Europe’s smaller stocks have outpaced their US counterparts this year as investors bet on an economic resurgence while trying to avoid companies most exposed to Donald Trump’s trade war. Investors have shifted their focus to previously overlooked small- and medium-sized companies in Europe, attracted by lower interest rates and the potential growth opportunities stemming from Germany’s €1tn stimulus plan.
On the other hand, Wall Street’s recovery from the sharp decline following President Trump’s tariff announcements in early April has been primarily driven by the country’s tech giants. Smaller US equities, which are more closely tied to domestic economic conditions, have lagged behind. This has resulted in a significant disparity between European and US equities, especially among small- and mid-cap stocks.
Since the beginning of 2025, the MSCI Europe small- and mid-cap index has risen by 10.7%, while the equivalent US index has fallen by 2.6%. In contrast, indices for larger companies have seen a 7% increase in Europe and a modest 1.2% rise in the US.
“We’ve witnessed a growing interest, particularly from US investors, in European mid-cap companies,” stated Aleksander Peterc, head of small- and mid-cap equity research at Bernstein. Clients are seeking out high-quality, undervalued stocks with exposure to European infrastructure spending and the German stimulus package.
The decline in borrowing costs has also played a role in driving investment towards European equities. The European Central Bank has slashed interest rates in response to economic conditions, while the Federal Reserve in the US has taken a more cautious approach. This divergence in central bank policies has further fueled the interest in European mid-cap stocks.
Analysts point to a renewed focus on stock-picking strategies, as investors navigate the uncertainties created by Trump’s trade policies. Active allocations in Europe are gaining traction as investors seek expertise in navigating the complex landscape of tariffs, currency fluctuations, and stimulus measures.
In conclusion, while the outlook for US small-caps remains uncertain due to the impact of Trump’s decisions on the economy, European smaller equities are experiencing a resurgence fueled by optimism around growth prospects and a shift towards domestic revenue generation in the face of global trade disruptions. Investors are increasingly turning to active management in Europe to capitalize on the diverse opportunities presented by the current market dynamics. Artificial intelligence (AI) has been making waves in various industries, and the healthcare sector is no exception. From diagnosing diseases to personalizing treatment plans, AI is revolutionizing the way healthcare is delivered. One area where AI is particularly promising is in medical imaging.
Medical imaging plays a crucial role in the early detection, diagnosis, and treatment of various medical conditions. However, interpreting medical images such as X-rays, MRIs, and CT scans can be a time-consuming and labor-intensive task for healthcare professionals. This is where AI comes in. By leveraging machine learning algorithms, AI can analyze medical images with greater speed and accuracy than human radiologists.
One of the key advantages of using AI in medical imaging is its ability to detect patterns and anomalies that may not be visible to the naked eye. For example, AI can identify subtle changes in tissue density that could indicate the presence of cancerous cells. By flagging these abnormalities early on, AI can help healthcare providers make more accurate and timely diagnoses, leading to better patient outcomes.
AI can also improve the efficiency of medical imaging by automating routine tasks such as image analysis and report generation. This can free up valuable time for healthcare professionals to focus on more complex cases and provide better care to their patients. Additionally, AI can help reduce the risk of human error in medical imaging, as it is not prone to fatigue or distractions like humans are.
Another area where AI is making a significant impact in medical imaging is in the development of personalized treatment plans. By analyzing a patient’s medical images and other relevant data, AI can help healthcare providers tailor treatment options to the individual needs of each patient. This could lead to more effective treatments with fewer side effects and better outcomes.
Despite its many benefits, AI in medical imaging is not without its challenges. For one, there are concerns about the potential for biases in AI algorithms, which could lead to inaccurate or discriminatory results. Additionally, there are privacy and security concerns surrounding the use of sensitive medical data in AI systems.
In conclusion, AI has the potential to revolutionize medical imaging by improving the accuracy, efficiency, and personalized nature of healthcare delivery. While there are challenges to overcome, the benefits of AI in medical imaging are clear. As technology continues to advance, we can expect to see even greater advancements in the field of medical imaging thanks to AI.
