Catenaa, Monday, March 03, 2025– European defense stocks had their biggest one-day jump in five years on Monday, as investors expect increased spending by the military after Trump and Zelensky’s growing rift.
The STOXX Europe Total Market Aerospace & Defense index had surged almost 7.9% by early afternoon local time, which put it on course for its biggest one-day jump in about five years. The index has risen more than 30% so far this year. The regional Stoxx 600 index moved between losses and gains in early deals, but was 1.2% higher.
Europe is worrying that the US, the continent’s longtime ally and security guarantor, may not help it defend itself in a future war, which is leading investors to anticipate that defense spending in the continent might have a massive increase in the future.
America’s new approach was further underscored Friday during an explosive meeting between US President Donald Trump and Ukrainian President Volodymyr Zelensky in the White House.
Ukraine, on the doorstep of the European Union, has been pushing for firm security guarantees from the US in any peace deal brokered between itself and Russia, but Trump has so far refused to provide them.
Among the biggest movers were Germany’s Hensoldt, which surged 29% during afternoon trade, Renk Group, which gained 18%, and Dassault Aviation, which was up 17%.
Sweden’s Saab, Italy’s Leonardo and France’s Thales also crowded the top of Stoxx 600 movers.
Rolls-Royce, a player in defense as well as commercial aerospace, which hit an all-time high last week after reinstating its dividend, added another 7.2%.
The shares of Germany’s Rheinmetall were trading up 12.9%, while those of BAE Systems in the United Kingdom had jumped 14.3%.
