Defense Stocks Tumble and Builders Rally on Ukraine Peace Hopes

European defense stocks slumped on Friday as a senior Ukraine official signaled progress toward a peace deal with Russia, while construction firms rose on bets that a ceasefire could trigger a post-war rebuilding boom.

A Goldman Sachs Group Inc basket of defense shares slid as much as 5.1% after Kyrylo Budanov, a top aide to Ukrainian President Volodymyr Zelenskiy, said that a resolution to the war may not take long to achieve. Rheinmetall AG, Hensoldt AG and Leonardo SpA, which have soared in recent years on the back of rising EU defense spending, fell more than 7%.