Rheinmetall shares fell by almost 5%. How is the EU defense sector reacting to changes in the peace talks with Ukraine?

Shares in European defense companies continued to fall on Monday after a sharp decline in the previous session. This came amid reports of progress in peace proposals between Ukraine and the US.

• The Stoxx Europe Aerospace and Defense Index fell 1.7% in early trading on Monday. This followed a decline of more than 3.4% on Friday.
• Shares in German defense giants such as Rheinmetall, Hensoldt, and Renk fell by almost 5%, placing them among the outsiders of the pan-European Stoxx 600 index. Swedish company Saab fell by 3.5%.
• European benchmark natural gas prices fell below €30 per megawatt hour, reaching an 18-month low.

Details of the negotiations

On the evening of November 20, Ukraine officially received a draft peace plan from the American side. Among the key points of the proposals were Ukraine’s renunciation of Donetsk, Luhansk, and Crimea, its refusal to join NATO, and the reduction of the Armed Forces of Ukraine to 600,000 personnel. On November 23, 2025, consultations between Ukraine and the United States of America took place in Geneva to determine the framework of the peace plan. 

On Sunday, the US announced progress in the peace talks, in which US Secretary of State Marco Rubio participated, although no agreement on security guarantees for Ukraine was reached.

Read more: Mindich Tapes. How the Ukrainian President’s ally tried to influence the Defense Minister and score big in defense procurement