The Ukraine crisis has taken an unexpected turn following a heated exchange at the Oval Office between Ukrainian President Volodymyr Zelensky and US Vice President J.D.

Washington has made it clear that Europe needs to defend itself. For some investors, that’s a call to load up on defense stocks.

The European Union committed to ramp up security spending just hours after President Donald Trump froze military aid to Ukraine.

European stock markets hit fresh record highs as European leaders pushed forward with plans to boost defense spending and support Ukraine. Defense stocks added $35 billion in market capitalization. France’s CAC 40 Index surpassed its May record high, while Germany’s DAX Index gained 3.4% for its biggest one-day advance since 2022.

Stock markets rebounded after U.S. Commerce Secretary Howard Lutnick dangled a plan to reduce tariffs on Canada and Mexico, but the dollar continued to sell off.

The prospective partners in Germany’s next government say they will seek to loosen the nation’s rules on running up debt to allow for higher defense spending