The European defense sector has completely gone on a rally.

In the past two days, the Europe-focused defense ETF $WDEF has surged nearly 12%.
This level of gap-up is driven by the resonance of three forces:
First, the EU just approved a defense plan worth about 1.5 billion euros, with substantial funds precisely allocated to missile, ammunition, and counter-drone production.
For defense companies, this is not just policy support but real orders and confirmed revenue.
Second, market confidence is shifting:
Recently, Trump again cast doubt on NATO in interviews, explicitly mentioning that the U.S. might reduce its contributions and adjust its European deployments.
This signal is forcing the market to reprice:
As Europe realizes it must defend itself independently, defense spending will increase significantly, shifting from security outsourcing to autonomous armament, and the market is beginning to reprice accordingly.
The urgency of the battlefield situation has reached a critical point.
Currently, a new large-scale offensive is brewing.
U.S. attention is diverted by the Middle East situation, negotiations between Russia and Ukraine have stalled, and there are no signs of de-escalation.
The tense situation has directly translated into a frantic demand for military supplies.
The best indicators of capital sentiment are these five defense companies:
Rheinmetall soared 12.40%
Leonardo jumped 12.21%
Saab increased 9.54%
Thales rose 8.15%
BAE Systems gained 7.51%
Their movements show that capital is flowing into core defense assets.
The rift between the EU and the U.S. is also widening.
In a market filled with uncertainty, government orders are the biggest certainty.
The era of European defense independence has truly accelerated…