Global Defense Stocks Climb on Trump's Call for USD1.5T Defense Budget
Trump disclosed the spending escalation late Wednesday via his Truth Social account, framing the decision as essential for national security amid escalating global tensions.
"After the long and difficult negotiations with Senators, Congressmen, Secretaries, and other Political Representatives, I have determined that, for the Good of our Country, especially in these very troubled and dangerous times, our Military Budget for the year 2027 should not be $1 Trillion Dollars, rather $1.5 Trillion Dollars," Trump stated in his post.
He continued: "This will allow us to build the 'Dream Military' that we have long been entitled to, and, more importantly, that will keep us SAFE and SECURE, regardless of foe."
The announcement triggered immediate market reactions. Pre-opening US trading showed Northrop Grumman jumping 6.8%, while Lockheed Martin climbed 6.7%. RTX gained 5.4%, and Kratos Defense advanced 6.6%.
European defense equities followed suit as the Stoxx Europe Aerospace and Defense index rose 1.4% in early Thursday sessions. Renk led European gains with a 3.6% increase, while Leonardo added 1.5%.
Asian defense manufacturers also benefited from the announcement. Mitsubishi Heavy shares climbed 2.4%, and Bharat Electronics edged up 0.3%.
The budget proposal comes amid heightened geopolitical activity. US military forces detained Venezuelan President Nicolas Maduro and his spouse during a weekend operation. American officials charged the pair with drug trafficking offenses Saturday morning in New York.
Following these developments, Trump has renewed territorial ambitions regarding Greenland and announced intentions to assert control over Venezuelan energy resources.
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