Key facts
- Democrats won majorities in both chambers of Congress in the midterm elections.
- Lockheed Martin, Northrop Grumman and RTX Corp were each down more than 2% premarket, per Dow Jones Newswires.
- Rheinmetall fell over 2%, BAE Systems 5%, Thales 3.8% and Leonardo 2.6%, the report said.
- Trump's fiscal 2027 budget proposal sought $1.5 trillion in defense spending and has not been approved.
- The House advanced a roughly $1.15 trillion defense bill in July, with issues unresolved.
- Jefferies analysts said control of Congress will determine leverage over the eventual funding outcome.
European defense stocks slid on November 4, 2026, after Democrats won majorities in both chambers of Congress in the midterm elections, a result analysts said could weigh on US military spending and reduce demand for contractors.
Shares of Lockheed Martin, Northrop Grumman and RTX Corp were each down more than 2% in premarket trading, according to a Dow Jones Newswires report. In Europe, Germany's Rheinmetall was down over 2% and the UK's BAE Systems was down 5%. In France, Thales was down 3.8%, while Italy's Leonardo was down 2.6%.
Earlier in 2026, President Trump released a budget proposal seeking $1.5 trillion in defense spending for fiscal 2027, including funding for the Defense Department and critical munitions, in an effort to expand the defense industrial base. The proposal has not been approved. The House advanced a roughly $1.15 trillion defense bill in July, with some issues still unresolved. Jefferies analysts wrote in a note to clients that control of Congress will determine leverage around the eventual funding outcome.