Global defense stocks surge after Trump calls for $1.5 trillion military budget in 2027

• U.S. defense stocks rose sharply in premarket trading, with major contractors gaining between 5.4% and 6.8%
• European defense stocks also rallied, with the Stoxx Europe Aerospace and Defense index adding 1.4% and individual stocks like Renk and others initially gaining over 4%
• Trump justified the $500 billion budget increase by citing 'troubled and dangerous times' and the need to keep the country safe regardless of foe

Summary: Defense Stocks Rally on Trump's $1.5 Trillion Military Budget Proposal

Key Development:

President Donald Trump announced plans to increase the U.S. military budget to $1.5 trillion for 2027, up from a previously proposed $1 trillion—representing a 50% increase. Trump stated this will enable building a "Dream Military" to keep the nation "safe and secure."

Market Impact:

Global defense stocks surged sharply on Thursday following the announcement made late Wednesday on Truth Social:

U.S. Defense Stocks (Premarket Trading):

• Multiple defense contractors gained between 5.4% and 6.8%
• Gains reflected strong investor optimism about increased government contracts

European Defense Stocks:

• Stoxx Europe Aerospace and Defense index rose 1.4%
• Renk advanced 1.5% after initial gains above 4%
• Another major European defense company gained 3.6% after paring earlier gains

Context:

The budget increase follows negotiations with senators, congressmen, and other political representatives. Trump emphasized the decision was made for national security amid what he described as "very troubled and dangerous times."

Investment Implications:

The substantial budget increase signals significant revenue opportunities for defense contractors across aerospace, weapons systems, and military technology sectors. Both U.S. and European defense companies stand to benefit from expanded U.S. military spending, with the market reaction indicating investor expectations for stronger order books and improved earnings prospects through 2027.

The announcement represents one of the largest proposed increases in U.S. defense spending in recent history, with broad implications for the global defense industrial base.