European equities declined on Wednesday, weighed down by broad weakness in banking and financial stocks, even as defense and aerospace names bucked the trend following renewed optimism on Ukraine from U.S. President Donald Trump.

The pan-European STOXX 600 index fell about 0.5%, with most sectors in the red. In particular, financials led the retreat, dragging on major markets across France, Germany, and the U.K. Bank stocks saw steep declines: names such as Deutsche Bank, Barclays, Société Générale, and others dropped over 1% each.

Against that backdrop, European defense and aerospace stocks gained momentum. The defense index jumped 0.8%, outperforming many peers. Swedish firm Saab soared by ~4% amid reports that Germany might consider acquiring its Global Eye surveillance aircraft. German sensor systems maker Hensoldt also rose ~4%. Italy’s Leonardo and Renk climbed ~2%, while Thales and Dassault Aviation registered gains in the 1%–1.6% range.

Trump made a notable rhetorical shift by stating he believes Ukraine could ultimately reclaim all land occupied by Russia. That comment boosted expectations of renewed Western support and possible increased defense spending in Europe.

Meanwhile, investor sentiment was fragile. Markets are still digesting the mixed signals from central banks, especially the U.S. Federal Reserve, and lingering concerns over growth, inflation, and geopolitical risk.

Looking ahead, key drivers for European markets will include:

• Further statements on Ukraine and Western support

• Earnings results, especially in financials and industrials

• Central bank guidance from the ECB and Fed

• Macro data on growth, inflation, and trade

In sum, while defense names showed strength today, the broader European equity landscape remains under pressure as underlying fundamentals and geopolitical risks weigh heavily.