Frankfurt’s DAX extended early gains to trade over 2% higher on Tuesday, leading European markets on the back of strong budget spending plans and upbeat economic data. Germany’s government approved draft budgets with €115.7 billion in investment for 2025 and €123.6 billion for 2026, up from €74.5 billion in 2024, aimed at stimulating growth. The government also reportedly plans to raise defense spending to 3.5% of GDP by 2029, ahead of a key NATO summit on defense spending beginning today. On the data front, the German Ifo business climate index rose to 88.4 in June, topping forecasts of 88.2 and improving from 87.5 in May. Meanwhile, President Trump’s announcement of a ceasefire between Israel and Iran helped ease immediate concerns over energy supply risks, though tensions remain high, with Israel accusing Iran of violating the agreement.