After White House summit between Donald Trump and Volodymyr Zelensky, international diplomacy is trying to chart a path towards a possible peace in Ukraine. On the market, however, the winds of peace are weighing on bagsI European defense stocks sink, while the American ones recorded only slight decreases, showing relative stability thanks to the billion-dollar orders from Kiev.
At Piazza Affari, Leonardo marks a heavy -9%, while the rest of Europe records significant decreases: Rheinmetall in Frankfurt (-5,55%), Thales (-4,02%) in Paris, Babcock (-7,45%) And Bae Systems (3,99%) in London and Saab in Stockholm (-7,65%). Only Airbus, more exposed to the civil sector, limits losses with -0,94%. On Wall Street, however, Lockheed Martin e Boeing they reduce the losses.
Why European defense stocks are suffering
The performance gap between European and US markets is linked to Kiev's security agreements. According to the summit, the United States will provide support to Kiev through intelligence and military training, while theUkraine to buy American weapons for a total value of 100 billion dollars, including air defenses such as Patriot missiles.
The package also includes a $50 billion agreement for the production of drones with Ukrainian companies, which the United States has committed to purchasing once exports begin. Zelensky himself confirmed: "There is indeed a package with our proposals worth $90 billion... And we have agreements with the US president that, when our exports begin, they will purchase Ukrainian drones. This is important to us."
Security guarantees for Ukraine are expected to be formalized within ten days. Part of the €100 billion could be financed by the European Union, thus diverting funds to US companies at the expense of European producers, undermining the long-running rally of continental producers.
The long rally in defense stocks
The defense sector has been through weeks of sharp fluctuations: after profit-taking ahead of the summer summit in Alaska between Trump and Putin, stocks had recovered ground shortly before the White House meeting. Despite recent declines, the performances remain record-breakingLeonardo is up over 70% since the beginning of the year and over 500% since the start of the Russian invasion, while Rheinmetall is up 157% since the beginning of the year.
