U.S. defense stocks Lockheed Martin, Northrop Grumman, Raytheon and General Dynamics rose sharply Monday as Europe and the U.S. sent weapons to Ukraine. U.K.-based BAE Systems led the rally, spiking to record highs.
Russian President Vladimir Putin put his nuclear forces on high alert Sunday after Western allies tightened economic sanctions designed to hit Putin and the country's oligarchs. Countries including Germany and Sweden hustled to send additional weapons into Ukraine, and Germany announced a historical increase in its defense budget.
The sanctions sent Russia's ruble crashing to a record low against the U.S. dollar on Monday. Russia shut down its stock market. The central bank hiked its target interest rate from 9.5% to 20%, while the U.S. moved to bar the bank from conducting transactions in U.S. dollars.
Russian troops reportedly faced tough resistance from Ukrainian forces. Europe and other Western allies continued to increase munitions and financial assistance flowing to support Ukrainian defense forces.
"For the first time ever, the European Union will finance the purchase and delivery of weapons and other equipment to a country that is under attack," said European Commission President Ursula von der Leyen Sunday.
Russia's invasion has even prompted historically neutral and non-NATO countries to announce economic and military support for Ukraine.
Swiss President Ignazio Cassis said it was "very probable" that Switzerland would join the European Union in sanctioning Russia.
Sweden, a non-NATO member and traditionally a staunchly neutral country, announced it would send anti-tank weapons, helmets and body armor to Ukraine.
A senior U.S. defense official told reporters Monday that security assistance from the U.S. and NATO "continues to arrive." The official said that U.S. military equipment has arrived as recently as in the last few days.
Defense Stocks Climb As Germany Raises Military Spending
Germany announced it would increase its defense budget to above the 2% of GDP mark that the NATO alliance requires each member to contribute by a 2024 deadline.
"We have to ask ourselves — what capacities does Putin's Russia have and which capacities do we need to counter his threats?" Chancellor Olaf Scholz told parliament Sunday.
The 2% NATO deadline was agreed to in 2014, following Russia's attack on the eastern Ukrainian peninsula of Crimea. President Donald Trump had pressed Germany to boost defense spending ahead of the deadline, threatening to recall U.S. troops from Germany if Berlin didn't increase its defense budget.
While no U.S. troops will be deployed to Ukraine, U.S. defense hardware is on the front lines.
Javelin anti-tank missiles, built by Lockheed and Raytheon, are part of a $350 million weapons package approved by the Biden Administration for Ukraine.
Lockheed's F-35s have flown NATO air policing missions in the Baltic and Black Sea regions. Boeing-made Apache attack helicopters are on their way to Poland and the Baltics.
Russia's invasion and other geopolitical risks raise the possibility of more defense spending by the U.S. and its allies in the years to come as the focus shifts from Afghanistan toward Russia, China and North Korea.
Earlier this month, General Dynamics received approval to sell $6 billion worth of M1 Abrams tanks to Poland.
Among defense stocks in midday trading, Lockheed shares ran up 6.7% to 433.80 on the stock market today. Northrop jumped 7.9% to 442.14 and General Dynamics added 2,8%. Raytheon rallied 4.7%. Northrop, General Dynamics and Raytheon all nailed record highs. U.K.'s BAE Systems was up 8.7%, reaching an all-time best as well.
Follow Gillian Rich on Twitter at @GillianRich_ for defense news and more.
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