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European defence stocks surge as Nato spending rises

Disquiet about future Pentagon policy has weighed on US military contractors
European defence stocks surge as Nato spending risesPublished on January 29, 2025
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European defence shares have outperformed their US counterparts since Donald Trump’s election, and pressure from across the Atlantic for Nato member states to ramp up spending could push valuations higher again.  

Since 5 November, continental defence players such as Rheinmetall (DE:RHM), Leonardo (IT:LDO) and Dassault Aviation (FR:AM) have surged at the same time as US stalwarts such as Lockheed Martin (US:LMT), Northrop Grumman (US:NOC) and General Dynamics (US:GD) have fallen amid uncertainty about the direction of policy at the Pentagon.

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