Defense stocks rally in 2026 as conflicts and military spending increase

Defense stocks are experiencing a new rally in 2026 due to ongoing conflicts and increased military spending. Geopolitical tensions, including the war in Ukraine and rhetoric from the US president, are driving defense stock performance in Europe and Asia. European defense stocks are projected to rise significantly as governments implement new armament programs. While peace talks could temper this rally, the prevailing market view is that governments will continue to increase defense spending, supporting the sector's long-term outlook.