U.S. defense stocks rose in premarket trading Monday on Israel Arms deal, Europe's plan to boost defense spending. RTX, General Dynamics, Lockheed Martin, and AeroVironment rose about 2%.

The Trump administration has approved a major nearly $3 billion arms sale to Israel, bypassing a normal congressional review to provide the country with more of the 2,000-pound bombs that it has used in its war against Hamas in Gaza.

The shocking scenes of President Donald Trump and Vice President J.D. Vance dressing down Ukrainian President Volodymyr Zelensky — and the ensuing reaction from European capitals — sent defense stocks up on Monday.

The biggest news came from Germany, where Bild and other publications report the country’s centrist parties are working on creating two large fiscal funds, outside the constitutional debt brake, with at least €200 billion ($208 billion) for a special defense fund. The reports also cite studies that Germany may need €400 billion of defense spending as well as €500 billion in public investment.

There had already been talks of the centrist parties using their brief time before a new parliament for extra spending, but the Oval Office blow-up appeared to accelerate it.

Meanwhile, at a special London summit on Sunday, featuring U.K. Prime Minister Keir Starmer and French President Emmanuel Macron, European countries made a commitment to increase defense spending.

“We think Germany was shocked by that event, which amplified fear that the U.S. is abandoning its role as Europe’s benign protector, and we see this as lending support to the fiscal negotiations,” said analysts at Evercore ISI.

Robin Winkler, Deutsche Bank’s chief German economist, said the higher end of money discussed for the German funds would be as much as has been invested in East Germany since reunification and worth up to 2% of GDP.