Trump’s Rift With Europe Adds Fuel to a Rally in Defense Stocks

Published On Feb 18, 2025, 10:21 AM

European defense stocks are rallying as investors anticipate increased military spending from European governments following concerns over reduced American military support. The Stoxx Europe Total Market Aerospace & Defense index has gained 19% this year, with companies like Rheinmetall seeing their shares surge over 50%. However, this optimism contrasts with broader economic gloom in Europe, fueled by fears of escalated borrowing costs and uncertainties in U.S.-European relations due to recent geopolitical tensions.