By George Glover

European defense stocks were rising again on Tuesday, while their U.S.-listed peers traded flat after President Donald Trump froze all military aid to Ukraine.

Europe's defense companies got a boost from the European Union unveiling a plan to encourage its members to pour more money into security and defense, just hours after a White House official said that Trump would be suspending aid until he determines that Ukrainian leader Volodymyr Zelensky is committed to peace with Russia.

European Commission President Ursula von der Leyen early Tuesday outlined a plan incentivizing EU member states to "significantly increase defense spending." Von der Leyen said the measures could mobilize up to 800 billion euros ($840 billion) worth of funds.

Shares in German arms manufacturer Rheinmetall rose 3.3% Tuesday, while French military aircraft manufacturer Dassault Aviation gained 4.1%. Thales, a French company specializing in electronics for defense, jumped 9.1% after it forecast that its sales would grow by between 5% and 6% this year as military spending rises.

U.S.-listed defense stocks weren't making big gains in the premarket. Lockheed Martin ticked up 0.2%, General Dynamics climbed 0.3%, and L3Harris Technologies added 0.4% ahead of the opening bell. Futures tracking the benchmark S&P 500 index were down 0.2%.

Write to George Glover at george.glover@dowjones.com

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March 04, 2025 06:09 ET (11:09 GMT)

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