Defense industry stocks fell amid progress in negotiations to end the war in Ukraine.

 

Progress in peace negotiations between Russia and Ukraine continues to be closely watched after Ukrainian President Volodymyr Zelenskyy said last weekend that Kyiv is willing to relinquish its NATO ambitions to secure a deal to end the war.

The European Aerospace and Defense industry stock index closed down 1.8%, with Swedish defense company Saab closing down 4.8%. Germany's Rheinmetall and Renk shares fell 4.5% and 4.3% respectively, and were among the biggest losers in Europe on Tuesday.

Meanwhile, US President Donald Trump told reporters on Monday that after "a very long and good negotiation" with European leaders, negotiators are "closer to a deal to end the conflict than they have ever been."

The strength of European leaders will also be tested this week as they discuss funding for Ukraine at a summit in Brussels on Thursday, including the possibility of using billions of euros of frozen Russian assets to guarantee a €210 billion ($246 billion) loan for Kyiv.