European Defense Spending Surges Amid Rising Security Concerns

European defense stocks surged as investors reacted to increased defense spending in response to security threats. Diplomatic efforts and a shift in fiscal policy across Europe, following a tense meeting between Ukraine's Zelenskiy and U.S. President Trump, have accelerated the continent's military investment plans.

Investors have flocked to European defense stocks, driving shares of arms manufacturers to record highs as the region ramps up military spending. This comes after an acrimonious meeting between Ukraine's President Zelenskiy and U.S. President Trump highlighted urgent security concerns.

The euro saw a rise as European diplomacy intensified, and nations aimed to bolster their defense budgets. European countries, having been marginalized in previous discussions between Washington and Moscow, are now keen to take charge of their security measures.

Germany's potential establishment of a defense fund and the UK increasing missile orders underline this shift. As bond yields rise across Europe, experts cite a paradigm shift towards prioritizing defense expenditures, marking a fiscal regime change of historical magnitude.

(With inputs from agencies.)