European defense stocks rallied yesterday after Ukrainian President Zelensky’s Friday Oval Office visit went worse than that dinner with the in-laws when wine was spilled all over their Persian rug.

With reports circulating that Trump might suspend military aid to Ukraine, which seems unwilling to agree to a ceasefire with Russia without security guarantees, the notion that Europe will need to spend big on its own guns and possibly support Ukraine without Uncle Sam’s help is hitting home.

This weekend, European leaders met to show unity with Ukraine and signaled that they mean business when it comes to bolstering collective defenses, enthusing investors. Buoyed by rapidly rising defense stocks, the European Stoxx 600 index is now beating the S&P 500 in year-to-date returns:

• Europe’s largest weapons producer, UK-based BAE Systems, rose nearly 19% yesterday, while France’s Thales, Germany’s Rheinmetall, and Italy’s Leonardo soared 23%, 14%, and 16%, respectively.
• The European Stoxx Aerospace and Defense index shot up nearly 8%, putting it at 30% in the green since the start of the year.

Not a blip

Even if Ukraine and Russia stop fighting, analysts say European countries would likely want to keep spending on arming themselves and Ukraine, as there’s no guarantee Russia won’t strike again.

• European military spending could reach 3.5% of GDP by 2032, rising from the present goal of 2% for NATO nations (met by 23 of 32 members in 2024), according to Morningstar Defense Analyst Loredana Muharremi.
• Meanwhile, AlphaValue Analyst Saima Hussain estimates that Europe’s yearly defense spending could surge by $156 billion. 

But some analysts warn that European defense industrial giants might lack the capacity to scale up arms production quickly, while others note that Europe’s bureaucracy typically moves about as speedily as America’s public transit.

Looking ahead: European Union leaders will meet in Brussels this Thursday and are expected to announce specifics on how they will collectively fund defense efforts.—SK

DOGE erased or altered 40% of the contracts listed on its website. The “wall of receipts” maintained by the government efficiency initiative removed or changed a significant amount of its claims of taxpayer savings, according to the New York Times, including “five of the seven largest savings that it had claimed credit for just last week.” DOGE first posted on Feb. 19 that it had clawed back $16 billion. Since then, the total has been revised to less than $9 billion. But the wall is not a complete reckoning. The DOGE website now includes language putting responsibility for the reported dollar amounts on federal agencies, saying the figures “originate directly from agency contracting officials.”

Anthropic secures $61.5 billion valuation after funding round. The company behind the AI chatbot Claude raised $3.5 billion from investors including Salesforce, Cisco, Jane Street, and Fidelity. With the new funds, Anthropic wants to expand its computational capacity and its presence in Asia and Europe. Also included in the funding update was confirmation that Amazon’s new Alexa+ personal assistant is powered by Claude. Amazon’s stake in Anthropic is currently worth approximately $8 billion.

The SEC will drop lawsuit against Kraken. The large cryptocurrency exchange said that the Securities and Exchange Commission had agreed in principle to drop the lawsuit the Biden administration pursued “with prejudice, with no admission of wrongdoing, no penalties paid and no changes to our business,” according to a company blog post. The update, titled “A win for fairness,” characterized the lawsuit as a “wasteful, politically motivated campaign” that sought to conduct “regulation by enforcement.” Kraken, along with other crypto companies, donated $1 million to President Trump’s inaugural committee. The blog post said, “We appreciate the new leadership both at the White House and the Commission that led to this change.” The move comes after the SEC dismissed or paused suits against other crypto companies in recent weeks, including Binance, Coinbase, and Robinhood.—HVL

Get out the salsa, because more chips are coming to the desert: The biggest semiconductor producer in the world, TSMC, is expanding operations in Phoenix.

Following a meeting with Taiwan Semiconductor Manufacturing Company CEO CC Wei yesterday, President Trump announced plans by the Taiwanese company to invest $100 billion in the US over the next four years:

• The deal expands upon TSMC’s previous $65 billion investment in Phoenix to build factories, for which it has received as much as $6.6 billion in grants through the CHIPS Act.
• Smoothing out a sticking point, TSMC agreed to bring over its most advanced technology rather than the older legacy tech it had already brought to Arizona.

It cuts both ways: The investment is a salve to both US concerns about falling behind in domestic chip manufacturing and Taiwan’s fears of tariffs on its highly lucrative chips. Trump previously said that Taiwan “stole” the US semiconductor business, and TSMC has worried that the administration could rescind its subsidies—fears that have been quieted by this investment.

Zoom out: TSMC joins a slew of tech companies, including OpenAI, Oracle, SoftBank, and Apple, that have become ardent supporters of US investment in the last few months.—CC

Decades after someone bravely asked “what if pizza end was like mozzarella stick?”, the world’s largest ’za chain is finally answering: Domino’s launched stuffed crust in the US yesterday, in a bid to win over Gen Z and hold on to customers who turn to rival takeout spots for cheesy crust.

Competitors including Pizza Hut, Little Caesars, and Papa John’s collectively sell stuffed crust to almost 13 million (young-leaning) Domino’s stalwarts every year, Domino’s Chief Marketing Officer Kate Trumbull told CNBC. When Pizza Hut introduced the menu item in 1995 (with a TV ad featuring Donald Trump), Domino’s thought it was “gimmicky” and would cause kitchen bottlenecks, per CNBC.

Instead, Pizza Hut sold $300 million worth of stuffed crust in its first year. When Papa John’s followed suit in late 2020, sales for the quarter jumped 30%.

Looking ahead…cheese-dough enthusiasm could help Domino’s cushion the sluggish 0.4% sales growth it reported last week, especially since stuffed crust customers tend to buy pizza more regularly and spend more per visit than non-stuffers.

But (lack of) awareness could be a problem: Nearly three-quarters of Domino’s customers thought it already offered stuffed crust, Trumbull said.—ML

Canada has launched a geopolitical boycott, and it’s a lot more likely to make an economic impact than “freedom fries” did: In a recent public opinion survey in Canada, ~66% of those surveyed said they are cutting back on buying US-made products. And 55% said they aren’t getting as many Amazon packages on their doorsteps since President Donald Trump revved up his rhetoric against the country of 41 million people.

Instead, Canadians are compiling and circulating lists of available domestic products, according to Bloomberg, and canceling travel plans to the US, the survey by Leger Marketing found. And while some of the behavior change is attributable to a growing sense of patriotism in Canada, part of it might come down to math. Trump’s tariff threats, which today become reality, have weakened the Canadian dollar against the American one, making American goods and services more expensive for consumers up north.—HVL