Defense Stocks Fall as Trump Pushes Ukraine Peace Deal

President Donald Trump said on Monday that the U.S. and Ukraine had made “big progress” in settling on a peace proposal to put to Russia, sending several defense stocks lower.

That, however, only trimmed the sector’s big year-to-date gains. Defense stocks can react to news, but their longer-term performance is typically a function of defense spending, which is currently expected to rise.

“Is it really possible that big progress is being made in Peace Talks between Russia and Ukraine??? Don’t believe it until you see it, but something good just may be happening. GOD BLESS AMERICA!” Trump wrote in a post on Truth Social on Monday.

Shares of France’s Thales, Germany’s Rheinmetall, and the U.K.’s BAE Systems fell 1.5%, 5%, and 3.6%, respectively, on Monday. Coming into the week, those three stocks were up an average of 87% year to date, boosted by expectations for rising European defense spending.

 Shares of drone maker AeroVironment, which has supplied its Switchblade loitering, guided bomb to the Ukrainian military, appeared to be unaffected by the peace talks. Shares rose 1.6%, while the S&P 500 and Dow Jones Industrial Average gained 1.6% and 0.4%, respectively. [MORE]