Defense Stocks Jump as Trump’s Ukraine U-Turn Fuels Gains

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Defense Stocks Jump as Trump’s Ukraine U-Turn Fuels Gains.

stock :: 2025-09-24 :: source - bloomberg

By Winnie Hsu and Paul Jarvis

(Bloomberg) -- Defense stocks rose anew across Europe and Asia on Wednesday after US President Donald Trump said NATO countries should shoot down Russian aircraft that violated their airspace and struck a more sympathetic tone on Ukraine’s chances of winning the war.

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A Goldman Sachs Group Inc. basket of European defense firms advanced as much as 3.1%, while South Korean names led regional gains in Asia.

Trump’s remarks “can be seen as reinforcing the case for European defense rearmament and markets are responding accordingly,” said Aneeka Gupta, director of macroeconomic research at Wisdomtree UK Ltd.

The defense sector has been a hot trade in stock markets globally as rising geopolitical tensions around the world as well as expectations of expanding military budgets boost investor interest. The MSCI World Aerospace & Defense Index is up 51% in 2025, eclipsing an advance of nearly 17% in a broader gauge of global equities.

European industry heavyweight Rheinmetall AG gained as much as 2.5% on Wednesday, while the UK’s BAE Systems Plc rose as much as 2.2%. Sweden’s Saab AB climbed as much as 5.8% to a record high.

In Asia, shares of Hanwha Aerospace Co., South Korea’s biggest defense contractor, surged 5.4% to an all-time closing high. The company has held talks with some Western European countries about helping them expand their arms-making capacity. Korea Aerospace Industries Ltd. and Hyundai Rotem Ltd. rose at least 3% each.

Japan’s IHI Corp. climbed almost 10% to be among the top-performing stocks on the Topix gauge, while Mitsubishi Heavy Industries Ltd. rose more than 5%. Australia’s DroneShield Ltd. surged over 6%.

In the US, Redwire Corp. rose 7.9% in premarket trading, set to extend Tuesday’s 14% surge, after the space company said its Edge Autonomy subsidiary had made an additional drone delivery to Ukraine’s armed forces.

“The comments from Trump signal that geopolitical risks are back in the spotlight and this is driving defense stocks higher,” said Jung In Yun, chief executive officer at Fibonacci Asset Management Global Pte. “With tensions showing no signs of de-escalation, the expectation is that order books of defense firms will be full for the next few years.”

--With assistance from Youkyung Lee, Eleanor Thornber and Subrat Patnaik.

(Updates with strategist’s comment in third paragraph, Redwire shares in eighth.)