European stock markets hit new record highs, Defense stocks added $35 billion in value after leaders pledged to increase military spending
- France CAC 40 and Germany’s DAX Index saw big gains. The Stoxx Europe 600 Index rose 1.1%. Defense stocks like BAE Systems, Rheinmetall, Thales, and Leonardo all went up by around 15%. The FTSE 100 in London also hit a new record.
- Investors expect European countries to increase their defense budgets because they worry the US might stop supporting them.
- Donald Trump said Ukraine is not ready for peace and threatened to stop US support after a tense meeting with Ukraine’s leader.
- UK Prime Minister Keir Starmer hosted a summit in London with Ukraine’s President Zelensky and other leaders to support Ukraine.
- European defense companies have been pushing for higher spending. Shares in companies like Airbus, Safran, and Rolls-Royce also rose.
- BAE, the UK’s biggest weapons maker, reported record profits and orders. Its stock has more than doubled since the war started.
- Economist Holger Schmieding said Europe, especially Germany, will likely increase defense spending. The UK and Norway have already pledged more support for Ukraine.
- Starmer announced the UK would raise defense spending to 2.5% of GDP by 2027, funded by cuts in international aid.
- Macron urged Europeans to spend more on defense to counter Russia. Germany’s likely new chancellor, Friedrich Merz, is also pushing for higher spending.
JPMorgan analysts said many European NATO countries will soon commit to higher defense spending
- France CAC 40: Saw significant gains.
- Germany’s DAX Index: Also experienced substantial growth.
- Stoxx Europe 600 Index: Rose by 1.1%.
- FTSE 100: Hit a new record high.
Defense Stocks Performance:
- BAE Systems: Up around 15%.
- Rheinmetall: Up around 15%.
- Thales: Up around 15%.
- Leonardo: Up around 15%.
- Airbus, Safran, Rolls-Royce: Also saw increases.
