European defense stocks saw a sharp decline following calls for peace negotiations in Ukraine and a ceasefire in Gaza, impacting Goldman Sachs’s portfolio. The volatility underscores the risks of conflict, leading investors to turn to U.S.-listed defense ETFs for stability and exposure to the theme.

Despite the recent sell-off in European defense stocks, U.S. defense ETFs like ITA, XAR, and PPA have shown more resilience, with ITA climbing over 33%. These ETFs provide exposure to U.S. contractors like Lockheed Martin, Northrop Grumman, and Rtx Corp, benefiting from high budgets, contracts, and export pipelines.

International defense budgets are expected to remain robust, even if conflicts in Ukraine or Gaza ease. NATO partners are under pressure to maintain or increase spending levels, benefiting American defense companies through domestic budgets and foreign sales.

While European defense stocks are sensitive to political news, U.S. defense ETFs benefit from long-term procurement cycles, offering investors a more stable investment option. The recent slip in European stocks serves as a reminder of the risks associated with short-term conflict dynamics, emphasizing the attractiveness of U.S.-listed defense ETFs for steady exposure to the industry.

Read more at Yahoo Finance: US Defense ETFs Could Gain Ground As Europe’s War Premium Deflates