‘There’s No Reason To Spend $1 Trillion On The Military’—Trump’s Statement Sends US Defense Stocks Spiraling While Europe’s Surge
U.S. defense stocks have taken a major hit after President Donald Trump suggested the country could cut its military budget in half. Meanwhile, European defense companies are thriving as investors expect a boost in spending across the region.
Trump on Feb. 13 floated the idea of significantly reducing the U.S. defense budget, which currently hovers around $1 trillion. He indicated plans to meet with China’s Xi Jinping and Russia’s Vladimir Putin to discuss global military spending cuts. “At some point, when things settle down, I’m going to meet with China and I’m going to meet with Russia, in particular those two, and I’m going to say there’s no reason for us to be spending almost $1 trillion on the military … and I’m going to say we can spend this on other things,” Trump said.
Markets reacted quickly, with major U.S. defense stocks dropping. Lockheed Martin (NYSE:LMT), Northrop Grumman (NYSE:NOC), General Dynamics (NYSE:GD), and Raytheon Technologies (NYSE:RTX) all slipped on the news. But this downturn is just a continuation. They have been in freefall following reports that the Department of Defense is preparing for spending cuts ahead of an audit by the Department of Government Efficiency, championed by Elon Musk.
🇺🇸🤔 US defense stocks are falling.
Over the month:
• Lockheed Martin: -16.41%
• Northrop Grumman: -13%
• General Dynamics: -10.93%
• Raytheon Technologies: -2.66%European defense stocks are rising:
🇩🇪 Rheinmetall: +36.4%
🇫🇷 Thales: +22.66%
🇬🇧 BAE Systems: +10.17%
🇪🇺…— MAKS 24 🇺🇦👀 (@Maks_NAFO_FELLA) February 18, 2025
While U.S. companies struggle, European defense stocks are soaring. Investors are betting on increased military budgets across Europe as the region faces pressure to boost its own defense spending. Rheinmetall saw a surge of 21.89% in the last 30 days and Thales climbed 19.23%. Others, like BAE Systems and Airbus, saw an increase but later stabilized. (Read more from “‘There’s No Reason To Spend $1 Trillion On The Military’—Trump’s Statement Sends US Defense Stocks Spiraling While Europe’s Surge” HERE)
