European defense stocks decline as Trump advocates for peace negotiations.

Written by Emily J. Thompson, Senior Investment Analyst

Source: SeekingAlpha

Updated: Aug 19 2025

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Source: SeekingAlpha

Market Reaction: European defense stocks experienced significant declines after President Trump suggested a meeting between Ukraine's Zelensky and Russia's Putin to negotiate peace, with major companies like Italy’s Leonardo and Germany’s Renk seeing drops of over 8% and 7%, respectively.
Diplomatic Context: The downturn followed Zelensky's recent visit to Washington and Trump's call for a peace conference, marking the first potential direct encounter between Zelensky and Putin since 2019.
Previous Stock Surge: Defense stocks had previously surged due to increased government contracts for military supplies to Ukraine and rising national defense budgets in response to threats from Russia, with some shares more than doubling in value this year.
Future Spending Outlook: Analysts predict that military spending in Europe will remain high regardless of any peace agreements, with expectations of increased obligations toward Ukraine and accelerated investment in defense initiatives.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.