the iShares Europe Defence ETF

European defense stocks are cooling off after the military spending boom. Here's what's next

European defense stocks enjoyed a bumper 2025, fueled by a sharp increase in state military spending targets in response to growing geopolitical instability. This year, however, the sector's fortunes have plateaued somewhat, with the Stoxx Europe Aerospace & Defence index down 1.2% year-to-date, compared with a 4.8% return in the broader Stoxx 600 index. But analysts see 2026 as a period of consolidation for the sector, in which bullishness over Europe's increased defense spending is...