Defense stocks tumble as investors fear Democratic gains could curb Trump’s spending push

Defense equities have sharply declined as market participants anticipate a Democratic advantage in the upcoming midterm elections, which could impede President Trump's ambition to increase defense spending by $500 billion. The iShares US Aerospace and Defense ETF dropped 16% between early July and mid-October, contrasting with a 3.5% rise in the S&P 500 over the same span. Analysts note that military budgeting has become a partisan issue, with Democrats likely to scrutinize high-profile initiatives like the “Golden Dome” and “Trump class” battleships.

Shares of Northrop Grumman, GE Aerospace, General Dynamics and Honeywell fell on Monday, extending recent losses, while Lockheed Martin edged lower. Boeing posted a modest gain but remains down 4.4% for the month, and several defense firms continue to grapple with supply-chain constraints and dwindling weapon stockpiles.