U.S. Nuclear Strategy Shift Raises Allies' Defense Costs and Risks

Recent changes in U.S. National Defense Strategy for 2026 dropped explicit mentions of extended deterrence, prompting allies to reconsider their defense strategies. Analysts warn this shift increases the risk of a proliferation cascade, as countries feel Washington is becoming more disengaged. France plans its first increase in warheads since 1992, while nations like Japan and Finland are moving closer to potential nuclear capabilities. For ordinary investors, this shift could signal heightened geopolitical tensions, which may affect market stability and defense sector investments.