European defense stocks fell Tuesday after the US pushed for talks between Ukraine and Russia, but analysts insisted any deal would drive the continent to increase defense spending regardless.
European arms manufacturers’ shares have more than doubled since the start of 2025 amid the threat from Moscow and concerns about Washington’s commitment to allies. But even the prospect of peace between Ukraine and Russia will see Europe bolster support to Kyiv, JPMorgan and HSBC analysts said.
European defense factories are expanding at three times the rate of peacetime, satellite analysis by the Financial Times showed, suggesting that Europe’s defense revival is “beginning to materialize not just in policy rhetoric or spending pledges but also in concrete and steel.”
