Defense stocks surge globally on Trump's $1.5 trillion budget call

Shares in major defense companies advanced globally after former U.S. President Donald Trump called for a massive $1.5 trillion military budget for the 2027 fiscal year. The proposal, which far exceeds current spending projections, prompted immediate investor optimism for increased government contracts across the aerospace and defense sector.

Market Gains Across Continents

The market reaction was swift and broad. In pre-market trading, leading U.S. contractors like Lockheed Martin and Northrop Grumman saw jumps of over 6%. In Europe, the Stoxx Europe Aerospace and Defense index rose, with companies such as Leonardo posting gains. Asian firms, including Japan's Mitsubishi Heavy Industries, also traded higher, underscoring the interconnected nature of the global defense industry.

Content of the Proposal

Trump outlined the proposal on his social media platform, stating the increase was necessary "for the Good of our Country" in "very troubled and dangerous times." He framed the $1.5 trillion figure as essential to building a "Dream Military" that would ensure national security. The statement represents a clear political signal, though any future budget would require congressional approval.

Strategic and Geopolitical Context

The budget call occurs amid a period of heightened geopolitical activity, including recent U.S. military operations in Venezuela and renewed strategic rhetoric concerning Greenland. Analysts view the proposed spending surge as aligning with a broader posture of military assertiveness, which markets anticipate would directly translate into procurement and modernization orders for defense firms worldwide.