Defense and military stocks in Europe and the United States surged across the board due to the impact of geopolitical conflicts. Among them, BAE Systems and other stocks hit record highs, as conflicts in the Middle East fueled market expectations of increased security spending. Goldman Sachs' defense stock basket index rose as much as 5.9%, marking its largest gain since early January and bringing its year-to-date cumulative increase to approximately 23%. BAE Systems shares climbed up to 8.3%, reaching a record high. Dassault Aviation rose 4.3%, Thales gained 6.2%, Rheinmetall increased by 6%, Hensoldt advanced 8.9%, Leonardo grew 6.5%, Saab jumped 8.7%, and Kongsberg rose 6.6%.
However, European stock markets fell collectively. As of the latest update, the UK's FTSE 100 index dropped more than 0.8%, France's CAC 40 declined over 1.4%, and Germany's DAX index fell more than 1.6%.
In the U.S., defense stocks also saw gains. Lockheed Martin rose more than 7.4% in pre-market trading, Raytheon Technologies increased by 6.5%, and Northrop Grumman advanced 5% before the market opened. These gains followed the upward trend of European defense stocks, as investors anticipate a prolonged conflict in the Middle East.
Prices of spot gold, silver, and crude oil also continued to rise.
In the Middle East, on March 2 local time, U.S. Central Command issued a statement saying that three U.S. F-15E fighter jets crashed during an operation in Kuwait due to a suspected "friendly fire" incident, but the pilots were safe. The statement noted that the cause of the accident is under investigation. Earlier that day, Iran's Khatam al-Anbiya Central Command announced that three U.S. fighter jets had been shot down by Iranian air defense systems. Alarms were triggered in more than 200 locations across Israel. The Public Relations Department of Iran's Islamic Revolutionary Guard Corps stated that Iran used "Khorramshahr-4" missiles to launch a fierce attack on the Israeli Prime Minister's Office and Air Force Command. The statement indicated that Iran's tenth missile attack on Israel primarily targeted Israeli government buildings, and further details and results of the military operation would be announced later.
Additionally, around noon on March 2 local time, air raid sirens sounded at the British military base in Akrotiri, Cyprus. Earlier that day, the Cypriot government issued a statement saying that a drone attack on the British Akrotiri Air Base in Cyprus caused "limited damage." The statement did not provide details on the extent of the damage. French Foreign Minister Barroux stated that France is "prepared and ready" to participate in defensive operations in the Gulf region.
