US defense contractors are on shaky ground just a month into the new administration — taking a backseat to European peers — as mounting concerns over a deluge of policies including a tightened military spending budget send shock waves across the government-sensitive group.

European officials talked of increasing defense spending at the Munich Security Conference. Saab and Hensoldt stocks stand to benefit.

A flurry of trading has helped push the Pan-European Stoxx 600 index to a record high as investors expect Europe’s governments to increase military spending.