Defense stocks including Lockheed Martin Corp ( LMT ) RTX Corp ( RTX ) and Northrop Grumman Corp ( NOC ) are trading higher Tuesday following reports the U.S. is considering allowing Europe to purchase American-made arms for Ukraine.

What Happened: According to a Bloomberg report, U.S. President Donald Trump has said he’s open to letting Europe buy U.S.-made weapons for Ukraine as his administration aims to bring an end to the ongoing war.

The report indicates that the move would allow Ukraine to use U.S. weapons despite the recent withdrawal of military support for Ukraine. Even if Trump cuts off U.S. aid, Ukraine may still be able to access American weapons.

Defense stocks faced selling pressure last week after Trump suggested that the U.S. could cut defense spending by as much as 50%, per CNBC.

“At some point, when things settle down, I'm going to meet with China and I'm going to meet with Russia, in particular those two, and I'm going to say there's no reason for us to be spending almost $1 trillion on the military … and I'm going to say we can spend this on other things,” Trump reportedly said.

“When we straighten it all out, then one of the first meetings I want to have is with President Xi of China and President Putin of Russia, and I want to say let's cut our military budget in half. And we can do that, and I think we'll be able to do that.”

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Trump went back and forth on military spending during his 2024 campaign and has continued to send mixed signals in the early part of his presidency. The latest comments on U.S.-made weapons for Ukraine appear to be boosting defense names in a headline-driven market Tuesday morning.

Officials from the U.S. and Russia also reportedly held peace talks on Tuesday to kick off discussions aimed at ending the war in Ukraine. Reports indicate that officials from Europe or Ukraine were not present at the meeting.

LMT, RTX, NOC Price Action: At publication time, Lockheed Martin ( LMT ) shares were up 1.72% at $430.46, RTX shares were up 1.58% at $124.34 and Northrop Grumman ( NOC ) shares were up 1.26% at $443.87, according to Benzinga Pro.

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