Published by Global Banking & Finance Review®
Posted on January 8, 2025
2 min readLast updated: January 27, 2026
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European defence stocks rose after Trump urged NATO allies to increase spending, with major arms makers seeing a 2-3% rise.
(Reuters) - European defence sector stocks rose on Wednesday after U.S. President-elect Donald Trump called for higher spending from NATO allies.
All leading European arms makers, including Rheinmetall, Dassault Aviation, Leonardo and Saab were up by 2-3%, while the pan-European defence index was 1% higher by 0910 GMT.
Stifel analysts highlighted Trump's comment that European NATO members should spend 5% of their GDP on the alliance's defence, up from the current 2% threshold.
At a Tuesday evening press conference at his Mar-a-Lago residence in Florida, Trump said allies, particularly Germany, spend too little on defence, adding that "they can all afford it".
Friedrich Merz, leader of Germany's opposition Christian Democrats, on Wednesday welcomed the idea of more defence spending but dismissed the wrangling over how much to specifically raise the NATO target by as "irrelevant".
Merz is seen as a likely successor to German Chancellor Olaf Scholz after a snap election in February.
German vice-chancellor and economy minister Robert Habeck from the Greens party said in an interview last week that Europe's top economy could spend around 3.5% of gross domestic product on defence.
Dassault Aviation's stocks were heading for their biggest single-day rise in almost three months after the Rafale fighter jet maker also reported robust 2024 orders data on Tuesday.
(Reporting by Andrey Sychev in Gdansk, Editing by Louise Heavens, Kirsten Donovan)
The article discusses the rise in European defence stocks following Trump's comments on NATO spending.
Trump's call for increased NATO spending led to a rise in European defence stocks by 2-3%.
Rheinmetall, Dassault Aviation, Leonardo, and Saab saw stock increases.
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