Market reaction
Spain's benchmark IBEX 35 index fell as much as 2.2% after President Trump ordered Treasury Secretary Scott Bessent to halt all trade with Spain, describing Madrid as a "terrible partner" in NATO. The move put the index on track for its largest one-day fall since May 4. The drop followed the president's comments made while standing alongside NATO Secretary General Mark Rutte in Ankara, ahead of the summit's formal session.
Summit backdrop and U.S. grievances
The Ankara summit, scheduled to run July 7-8, 2026, has been marked by notable friction. On arriving in Turkey, the president said he might have stayed away from the meeting entirely if not for his personal friendship with Turkish President Recep Tayyip Erdogan. He also declined to rule out additional U.S. troop withdrawals from Europe.
Addressing reporters alongside President Erdogan, the president voiced deep discontent with NATO, saying the United States was "very disappointed" with the alliance. He accused European allies of refusing to allow American forces to use their airspace and bases during the U.S.-Israeli campaign on Iran, and questioned the rationale for large U.S. defence expenditures if reciprocal support is unavailable.
"Why are we spending hundreds of billions of dollars, and they're not there for us? We've always been there for them," the president said.
Alliance leadership response
Mark Rutte sought to limit the political fallout ahead of Wednesday's formal session, calling the president's complaints "isolated cases" and defending recent U.S. strikes on Iran. Rutte emphasized the need for a forceful reaction when ceasefire violations occur and underscored the urgency of addressing capability shortfalls raised at the alliance's defence industry forum.
"When you have a ceasefire and Iran is basically violating the ceasefire, I think it is totally crucial that the U.S. forcefully react," Rutte said. He added, "We don't have the luxury of time. We need capabilities now to ensure we remain ready."
Procurement and spending pledges
Against the tense diplomatic backdrop, NATO unveiled arms deals valued at no less than $50 billion on Tuesday. Those agreements include European countries purchasing surveillance drones from Northrop Grumman and the alliance procuring early-warning aircraft from Sweden's Saab. The announcement comes as allies seek to address capability gaps amid shifting U.S. policy.
Since last year's summit in The Hague, where members committed to spending 5% of GDP on defence by 2035, the transatlantic context has deteriorated. The president threatened withdrawal from the alliance in April, conducted campaign actions on Iran without consulting European members and has repeatedly questioned the value of U.S. commitments. In response, European nations and Canada have moved to plug capability shortfalls, and the draft summit declaration cited $139 billion in additional defence spending pledged ahead of the current meeting.
Strategic uncertainty and a looming decision
Reports have indicated that NATO is weighing whether to skip its scheduled 2027 summit to avoid further friction with Washington. The critical matter for markets and policymakers as the Ankara summit moves toward its close is whether the president will sign a communiqué that reaffirms Article 5 collective defence commitments. Failure to endorse such a declaration would mark a historic rupture in allied relations.
What to watch next
Investors and officials will be closely monitoring the summit's final communiqu e9 and any follow-up actions from the United States and European capitals. The immediate market reaction in Spain underscores how diplomatic disputes can transmit quickly to equity prices, while the large defence procurement announcements show a parallel push to shore up military capabilities amid political uncertainty.
This article presents developments reported at the Ankara summit and the market response, and does not introduce facts beyond those described by officials and delegations present at the meeting.