European defense stocks surged Monday, buoyed by the prospect of higher military spending, while global markets were largely subdued with the U.S. closed to mark Presidents Day.
Stocks such as London-listed BAE Systems, Thales in France, and Germany’s Rheinmetall, climbed more than 7%. The gains came after North Atlantic Treaty Organization allies said they needed to boost defense budgets to support Ukraine and deter Russia from any potential further attacks.
The Stoxx Europe 600 index rose slightly more than 0.5% to reach a new closing high. It had already notched seven record closes in 2025, as European markets have made a strong start to the year.
U.S. index futures inched higher. This week is set to bring more blue-chip earnings, including from Walmart and Warren Buffett’s Berkshire Hathaway.
So far in this results season, 383 members of the S&P 500 have reported, with earnings on aggregate beating expectations by 6.3%, according to LSEG. That is better than a long-term average of 4.2% outperformance.
In Japan, benchmark borrowing costs hit the highest since 2010, after data showed the economy grew at a faster-than-expected 2.8% annualized rate in the final quarter of last year. That bolstered expectations the Bank of Japan would lift interest rates further this year.
Ten-year yields rose to 1.393%. The Nikkei 225 stock index eked out a 0.1% gain.
Stocks in China were mixed, despite Chinese leader Xi Jinping meeting with leaders of the technology industry Monday, including Alibaba co-founder Jack Ma, signaling a tech crackdown was over. China is contending with fresh U.S. tariffs imposed by President Trump.
“The meeting shows that Beijing is turning more pro-business as the trade war 2.0 looms,” wrote Larry Hu, Macquarie’s chief China economist, in a note.
China’s beaten-down tech stocks have rallied recently, helped by optimism about the emergence of artificial-intelligence upstart DeepSeek.
Shares in Alibaba slipped in Hong Kong Monday. They had jumped in New York trading Friday, taking year-to-date gains to 47%. Stock in Tencent—which is testing integrating DeepSeek into its Weixin messaging app—advanced.
Overall, Hong Kong’s Hang Seng Index ended close to flat. In mainland China, the Shanghai Composite rose 0.3%.
Oil prices edged higher, lifting most actively traded Brent crude futures to $75.22 a barrel. Bitcoin slipped to about $95,500.
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