Last weekend, the US submitted to Ukraine a 28-point peace proposal and set a deadline for a response on November 27. The framework was discussed in Geneva on November 22, with US President Donald Trump saying after the meeting that a positive thing was happening.
The immediate peace-making move has left many investors uncertain, triggering a wave of stock divests by Rheinmetall - Germany's largest arms maker and a key military equipment supplier to Kiev.
Rheinmetall shares have fallen more than 14% in the past 5 days. Defense electronics company Hensoldt also recorded a similar decrease.
Observers say the main reason for this situation is that investors are concerned that the end of the conflict could lead to the end of the breakthrough growth period of defense stocks.
Germany has become the second largest arms supplier to Ukraine after the US.
Rheinmetall - a manufacturer of tanks, artillery and ammunition - recently reported a sharp increase in profit in the first 9 months of 2025, along with record orders due to the conflict and increased defense budget of the European Union (EU). The company's stock has gained nearly 2,000% since the conflict escalated nearly four years ago.
In the previous US mediation effort in February, Rheinmetall CEO Armin Papperger argued that even if the conflict ended, it was wrong for Europe to claim to have a peaceful future.
The European defense industry is growing at a rate about 3 times higher than before 2022. Western leaders have affirmed that rapid expansion is necessary to meet NATO's combat readiness goals, maintain weapons supplies to Kiev and deter what they described as a potential threat from Russia.
Moscow, for its part, called the statements an unreasonable threat to justify the increase in military spending and condemned what it called the Wests reckless Militarization attempt.
