It’s a dream come true for investors with heavy defense stock holdings. On Thursday, defense stocks surged after President Trump called for a massive $1.5 trillion defense budget next year.
The figure was floated in a Truth Social post on Wednesday. That would be an increase of roughly 50% over the 2026 budget of $901 billion.
“I have determined that, for the Good of our Country, especially in these very troubled and dangerous times, our Military Budget for the year 2027 should not be $1 Trillion Dollars, but rather $1.5 Trillion Dollars. This will allow us to build the “Dream Military” that we have long been entitled to and, more importantly, that will keep us SAFE and SECURE, regardless of foe,” Trump wrote.
Presumably, the beefed-up budget would help pay for some of Trump’s military ambitions, which include a Golden Dome air-defense system, and even a new naval ship design. As for how it’d be paid for, Trump’s Truth Social post suggests that tariff revenue could help cover the additional costs.
The reaction by the markets was predictable, as defense companies saw share prices rise during pre-trading Thursday morning. As of around 11 a.m. ET, Northrop Grumman shares were up around 3.75%, Lockheed Martin shares were up more than 6%, and Raytheon shares were up 2%.
Interestingly, Trump’s “dream military” post also comes soon after he also floated the idea of preventing defense companies from conducting stock buybacks or paying dividends to shareholders. That idea came in response to the president’s frustration that defense companies were not moving quickly enough, as he wrote in another Truth Social post earlier on Wednesday.
As it stands, it’s unclear how realistic a huge increase to the defense budget is, but according to reporting from Politico, many Republican members of Congress have already voiced support for the increase, including House Appropriations Chair Tom Cole, Representative Steve Womack of Arkansas, and Don Bacon of Nebraska.
Discover more from The Veteran-Owned Business Blog
Subscribe to get the latest posts sent to your email.
You must be logged in to post a comment.