LONDON — European stocks were in negative territory at the opening bell on Thursday, though defense stocks rallied over Donald Trump’s call for U.S. military spending to rise.
The pan-European Stoxx 600 was last seen almost 0.2% lower at 9:54 a.m. in London (4:54 a.m. ET).
Global markets have been focused on rising geopolitical tensions this week after the U.S.’ deposing last weekend of Venezuelan President Nicolas Maduro, and then threats to seize Greenland.
Defense stocks extended gains on Thursday as investors, putting the sector on track for a fifth consecutive day of gains as Trump called for a 50% increase in U.S. military spending. He is eyeing a $1.5 trillion budget in 2027, per a TruthSocial post late Wednesday.
“After the long and difficult negotiations with Senators, Congressmen, Secretaries, and other Political Representatives, I have determined that, for the Good of our Country, especially in these very troubled and dangerous times, our Military Budget for the year 2027 should not be $1 Trillion Dollars, rather $1.5 Trillion Dollars,” he wrote.
“This will allow us to build the “Dream Military” that we have long been entitled to, and, more importantly, that will keep us SAFE and SECURE, regardless of foe.”
Stoxx Europe Aerospace and Defense index added 1.4%. Renk, Leonardo and Rheinmetall led the European benchmark, gaining 1.7%, 3.8% and 2.2%, respectively, each paring earlier gains.
European oil stocks moved lower on Wednesday, extending their losses for a second day, as investors reacted to speculation that U.S. companies could extract Venezuelan oil. BP fell 0.9%, Shell lost 2.4%, and Equinor dipped 0.5% in early dealmaking.
The price of Brent crude futures for March was last seen at $60.01, just rebounding from dipping below the $60 mark on Wednesday.
Wall Street closed lower Wednesday, and defense stocks fell after Trump said he “will not permit” defense companies to issue dividends or stock buybacks until they address his complaints about the industry, including executive pay packages and production issues.
European markets have been on high alert this week following Trump’s threats that the U.S. could use military force to acquire Greenland, a semi-autonomous territory of Denmark.
Regional leaders have pushed back against Trump’s takeover aims, and U.S. Secretary of State Marco Rubio is due to meet Danish officials next week. Rubio has played down the threat of an invasion, saying Trump wanted to “buy” Greenland.
Asia-Pacific markets traded mixed overnight while U.S. stock futures hovered near the flatline.
Investors this week are awaiting the Supreme Court’s opinions on the legality of tariffs imposed by Trump expected on Friday. The ruling could lead to some potential market volatility.
There are no major earnings or data releases due Thursday.
