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Defense Stocks Fall as Trump Pushes Ukraine Peace Deal. What It Means for Markets.

Nov 24, 2025 07:20:00 -0500 by George Glover | #Politics

Ukraine’s President Volodymyr Zelensky during a meeting with U.S. President Donald Trump and members of his cabinet at the White House last month. (Andrew Harnik/Getty Images)

Key Points

President Donald Trump said on Monday that the U.S. and Ukraine had made “big progress” in settling on a peace proposal to put to Russia, sending several defense stocks lower.

That, however, only trimmed the sector’s big year-to-date gains. Defense stocks can react to news, but their longer-term performance is typically a function of defense spending, which is currently expected to rise.

“Is it really possible that big progress is being made in Peace Talks between Russia and Ukraine??? Don’t believe it until you see it, but something good just may be happening. GOD BLESS AMERICA!” Trump wrote in a post on Truth Social on Monday.

Shares of France’s Thales, Germany’s Rheinmetall, and the U.K.’s BAE Systems fell 1.5%, 5%, and 3.6%, respectively, on Monday. Coming into the week, those three stocks were up an average of 87% year to date, boosted by expectations for rising European defense spending.

Shares of drone maker AeroVironment , which has supplied its Switchblade loitering, guided bomb to the Ukrainian military, appeared to be unaffected by the peace talks. Shares rose 1.6%, while the S&P 500 and Dow Jones Industrial Average gained 1.6% and 0.4%, respectively.

Shares of RTX , Lockheed Martin , Northrop Grumman, and General Dynamics averaged a small loss on the day. RTX shares managed to rise 2.1%. Those four stocks were up an average of 22% year to date, heading into the week. AeroVironment shares were up 77%.

Oil prices were down only marginally to start the day, despite the potential that any peace deal could lead to more barrels of Russian crude hitting the market. The Brent crude oil price was up about 1.2% at $62.12 per barrel just after 4 p.m. Eastern time. West Texas Intermediate U.S. prices were up 1.5% at $58.93.

While oil had fallen over the past week, the lack of a significant move on Monday could signal that traders don’t expect a quick agreement.

Trump’s comments on Truth Social came after the White House released a statement on Sunday saying the continuing talks with Kyiv in Geneva had been constructive, adding that the two sides had modified parts of Trump’s peace framework to end the war with Russia.

Trump would like an agreement by the U.S. Thanksgiving holiday, later this week, though that date isn’t set in stone, wrote Vertical Research Partners analyst Rob Stallard on Monday.

Officials in both Europe and Ukraine had argued that Trump’s initial 28-point plan for peace would infringe on Ukraine’s sovereignty and security, while fulfilling the goals of Russia’s President Vladimir Putin.

“Rewarding Russian butchery would be disastrous to America’s interests,” tweeted Sen. Mitch McConnell on Friday.

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“Putin wants legal recognition for what he has stolen, to break the principle of territorial integrity and sovereignty, and that’s the main problem,” Ukraine’s President Volodymyr Zelensky told lawmakers in Sweden via video link on Monday.

The Kremlin said early Monday that it had yet to receive any information about the talks in Geneva, and that there were no plans as of yet for the Russian and U.S. delegations to meet this week.

Capital Alpha Partners analyst Byron Callan wrote Sunday that the most likely outcome of the peace proposal was that “nothing really changes” and the U.S. continues to support Ukraine in its effort against Russian invaders. It is also possible that fractures form between the U.S. and Ukraine, leaving the latter leaning on European nations for more support.

Option three is that a peace deal is ultimately secured. Callan sees that as an unlikely scenario.

Write to George Glover at george.glover@dowjones.com