Trump's Greenland and NATO comments spark defence stocks rally

Shares in Leonardo SpA rose 4.8%, Rheinmetall AG jumped 6.1%, SAAB AB rose 3.8% Kongsberg Gruppen ASA gained 2.9% during midday trading in Europe, as markets reacted to speculation that Trump's comments could pressure European nations to ramp up defence budgets significantly. 

Trump doubled down on his long-standing criticism of NATO allies for not contributing sufficiently to the alliance. 

He reiterated that NATO's current 2% of GDP spending benchmark is insufficient, suggesting that the target should be much higher. Trump argued that a higher percentage would ensure better military readiness and a fairer distribution of financial responsibility among NATO allies. 

"At that point, it was 2%, it should be 5%... not 2%", he said, underlining the need for greater military readiness and equitable financial contributions among member states.

During the press conference, Trump also recounted his earlier efforts to secure increased NATO funding. 

"I raised over $680bn (€652bn) by saying if you don't pay, we’re not going to protect you. And as soon as I said that, the money came pouring in," he said.

According to NATO's latest report, 2024 marked a record year for military spending compliance, with 23 of the alliance's 31 members meeting the 2% of gross domestic product (GDP) target. 

Poland led the Europe's bloc with military expenditures at 4.1% of GDP, while Estonia and Latvia followed at 3.4% and 3.1%, respectively.

However, some nations, including Italy, Portugal, Spain, Slovenia, Croatia and Belgium, remain below the 2% benchmark. 

Except for Belgium, all NATO members allocated at least 20% of their defence budgets to equipment, meeting alliance guidelines.

Shifting his focus to Greenland, Trump underscored its importance to US