Europe will likely have to spend hundreds of billions to prepare to defend itself without U.S. help, and will have to find ways to do that without spooking bond investors.

Shares in Germany's Rheinmetall have soared 57% this year, while BAE Systems is up 17% and France's Thales has gained 22%.

European nations that are part of NATO are boosting their defense spending and are appealing to President Trump's demands on contributions. Charlotte Howard, The Economist's executive editor, joins CBS News with more.

As the U.S. becomes an increasingly unreliable ally, the pressure is mounting on Europe to pay for its own defense. But the transition will be slow.

European defence stocks surged on Monday as governments faced pressure to hike military spending in the region, following calls from Washington for higher expenditure ahead of talks between the U.S. and Russia on a possible Ukraine peace deal.

Constellium SE stands to benefit from U.S. tariffs on aluminum, boosting local demand and enabling price increases. Read why CSTM stock is a Buy.

European shares closed at a record high on Tuesday, with banking and defence stocks among top gainers as investors priced in the likelihood of increased domestic military spending against a backdrop of peace talks to end the Russia-Ukraine conflict.

Shares jumped in early trade after NATO allies’ remarks about the need to boost Western defense budgets to continue to support Ukraine and deter Russia from potential attacks.