Defense Giants Leonardo, Saab, Rheinmetall See Stock Declines Amid Positive Summit Signals

European defense companies’ shares tumbled as investors reacted positively to the US-Ukraine-EU summit, signaling optimism about security assurances and reduced immediate demand for arms.

Defense Stocks Drop Across Europe

On Tuesday afternoon trading, major European defense companies posted sharp declines, standing in contrast to broader market gains. According to CNBC data:

• German tank component manufacturer Renk fell 6.97% to €57.8 on Deutsche Börse Xetra.
• Italian defense giant Leonardo dropped 7.28% to €45.72 on Euronext Milan.
• Swedish aerospace and defense company Saab slid 6.27% to 499.4 SEK on the Stockholm Stock Exchange.
• German arms producer Rheinmetall lost 4.4%, trading at €1575.5 on Deutsche Börse Xetra.
• French aerospace group Dassault Aviation declined 3.02% to €269.4 on Euronext Paris.

In contrast, the European STOXX 600 index gained 0.51%, reaching 556.82 points, showing that defense stocks were moving against the general market trend.

Trump Hails Talks as “Very Good”

US President Donald Trump described the Washington meeting with Ukrainian President Volodymyr Zelensky and European leaders as “very good.” According to Trump, the main outcome was an agreement that European countries will provide Ukraine with security guarantees in coordination with the United States. He also confirmed preparations for a direct meeting between Russian President Vladimir Putin and Zelensky.

Market Analysts See Cautious Optimism

Rabobank’s Head of Macroeconomic Strategy, Elwin de Groot, commented on the market moves, noting that investors viewed the summit outcome as a “positive story.”

“This is a rather modest but positive reaction... yet, there remain many questions about how much growth potential markets really have, given the ongoing economic challenges, especially in Europe,” said de Groot.

Focus Shifts to Federal Reserve Symposium

Looking ahead, Reuters highlighted that investor attention is turning to the upcoming US Federal Reserve symposium in Jackson Hole, where Fed Chair Jerome Powell is expected to deliver key economic forecasts later this week.