ASIATODAY.ID, WASHINGTON — Global defense stocks have surged sharply amid escalating geopolitical tensions driven by the increasingly aggressive posture of US President Donald Trump.
A surprise military operation in Venezuela, renewed threats to seize Greenland, and a pledge to boost US defense spending to $1.5 trillion have sent shares of military contractors soaring worldwide.
Over the past week, defense stocks have climbed by more than 10% on average, with European arms manufacturers leading the rally. Sweden’s Saab jumped nearly 25%, while Germany’s Rheinmetall surged around 20.5%, marking one of the sector’s strongest performances in years.
The latest spike came on Thursday after Trump called for a 50% increase in US defense spending by 2027, claiming the move was necessary to build what he described as a “dream military.”
Geopolitics Turns War into a Market Driver
Market analysts say the rally reflects rising global instability and the direct impact of Trump’s confrontational foreign policy.
“Geopolitics is the inescapable story of 2026 so far,” said Neil Wilson, investor and strategist at Saxo Bank.
“Defense stocks are clearly the trade — alongside rare earths.”
Venezuela Shock and Regional Threats
Last weekend, Trump launched a surprise operation in Venezuela, detaining President Nicolas Maduro and his wife and transferring them to New York to face multiple criminal charges, including drug trafficking. Maduro has denied the allegations, describing himself as a “prisoner of war.”
Trump has also vowed to keep Venezuela and its oil market under US control “for the time being,” further rattling regional stability.
Following the Venezuela operation, US officials issued fresh threats against Cuba and Colombia, while Washington escalated pressure on Iran, where nationwide protests have intensified after a sharp currency collapse.
Greenland Claim Sparks NATO Alarm
The Trump administration has also revived its controversial claim over Greenland, an autonomous territory of NATO ally Denmark. Washington argues it must control the island to ensure Arctic “security” and counter alleged threats from Russia and China.
The demand has been firmly rejected by Denmark and Greenland, as well as several European NATO members, who warned that any attempt to seize the island by force could fracture the US-led alliance.
Defense Industry Profits as Global Tensions Rise
The surge in defense stocks underscores a stark reality in global markets: escalating conflict and militarization are increasingly driving investor confidence.
As geopolitical risks mount, arms manufacturers are emerging as the clearest financial winners in an increasingly unstable world. (RT)
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