President Joe Biden said Thursday that the world is at an “inflection point in history” as he urged Congress to approve billions of dollars of military aid for Israel and Ukraine.
Geopolitical risks are mounting and Biden said the funding–expected to be around $100 billion–was a “smart investment” that would pay dividends for American security for generations. He said he plans to send an urgent budget request to Congress Friday.
Markets are on edge as the Israel-Hamas conflict continues. European stocks started Friday on the back foot, but two defense stocks–
BAE Systems
(ticker: (BAE.U.K.) and
Rheinmetall
(RHM.Germany)–were among the few risers.
British defense contractor
BAE Systems
has climbed 4.7% in October, while Germany’s
Rheinmetall
is up 7% over the same period.
There were also early gains for U.S. defense stocks in premarket trading–
General Dynamics
(GD) was up 0.8%, while
Lockheed Martin
(LMT) edged 0.2% higher. The SPDR S&P Aerospace & Defense exchange-traded fund (XAR) climbed 1.8% in after-hours trading Thursday.
Biden’s Oval Office address could reinvigorate the trend toward increased defense spending in countries around the world, notably in Europe.
In addressing the nation, Biden said making sure Israel and Ukraine succeed is vital for America’s national security. “History has taught us that when terrorists don’t pay a price for their terror, when dictators don’t pay a price for their aggression, they cause more chaos and death and more destruction,” he said.
“They keep going and the cost and the threats to America and to the world keep rising,” Biden added.
Write to Callum Keown at [email protected]
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