Lockheed Martin and other defense stocks jumped as Germany increases military spending

Lockheed Martin and other defense stocks jumped Monday Feb. 28 after Germany announced plans to bolster its military strength, sinking €100 billion ($111 million) into a fund.

Lockheed Martin (ticker: LMT) was up 3.77% in premarket trading, General Dynamics (GD) increased 3.96%, Northrop Grumman (NOC) rose 4.47% and Raytheon Technologies (RTX) added 5.23%.

The stocks were reacting to comments made by German chancellor, Olaf Scholz, on Sunday in an emergency session of the Bundestag following Russia’s attack on Ukraine.

He said Germany would almost double its military spending, and buy fighter planes made in the U.S. for the first time in decades, according to The Wall Street Journal. It quoted him saying: “Putin wants to establish a Russian empire,” and it quotes Scholz posing a question of “whether we can summon the strength to set boundaries to warmongers like Putin.”

The fund will be set up immediately, and Scholz said defense spending would be ramped up in coming years to above 2% of GDP, an increase from 1.5%.