European Defense Stocks Plunge

The collapse was triggered by tariffs announced by the US President.

Defense stocks bore the brunt of the collapse in European stock markets, with shares of Germany's Rheinmetall AG falling 27%, the sharpest one-day drop in history, Bloomberg reports.

Shares of France's Thales SA, Germany's Hensoldt AG, Italy's Leonardo SpA and Sweden's Saab AB also fell. “The hopes of defense companies in Europe have collided with reality. Increases in defense spending have not yet materialized, and we are now in a situation of a sell-off in stocks overall,” said Chris Beauchamp, chief market analyst at IG Group.

In 2024, the EU's defense spending will amount to €326 billion, or 1.9% of the bloc's GDP, according to the European Defense Agency. The EU plans to increase spending over the next four years: in early March, the EU countries approved the €800 billion ReArm Europe rearmament plan, presented by European Commission President Ursula von der Leyen.

The collapse of global markets was triggered by tariffs announced by US President Donald Trump. A Reuters report that American company Howmet Aerospace Inc., which supplies parts for Airbus SE and Boeing Co. aircraft, declared force majeure due to Trump's tariffs further darkened the mood, the agency notes.

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