Defence stocks surge after Trump calls for USD1.5t military budget in 2027
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The news: US and European defence stocks rallied on Thursday after US President Donald Trump called for a USD1.5 trillion ($2.24 trillion) defence budget in 2027.
The numbers: Northrop Grumman was up 8.5% at 8:15am ET (12:15am AEDT Friday) in premarket trading on Thursday, while Lockheed Martin rose 7.9%, TRX lifted 3.6% and Kratos was up over 12%.
Across the pond, the Stoxx Europe Aerospace and Defence index was up 2.5% at 2:15pm CET (12:15am AEDT Friday), while Renk and Leonardo lifted 2.5%. UK firm BAE Systems climbed 5.35% and Germany’s Rheinmetall was up 1.45%.
The context: The moves followed a Truth Social post by Trump on Wednesday evening, in which he wrote: “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,” he wrote in a TruthSocial post late Wednesday.
“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 sources: Truth Social, CNBC, Bloomberg
