Wall Street Flat as Defense Stocks Surge/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Wall Street traded quietly as major indexes hovered near record levels, masking sharp gains in defense stocks. Military contractors surged after Donald Trump called for a major increase in defense spending. Mixed economic data and rising Treasury yields kept broader market moves muted.
Defense Stocks Surge Quick Looks
- Major indexes showed limited movement despite sector volatility
- Defense companies jumped after Trump proposed higher military spending
- Northrop Grumman, Lockheed Martin and L3Harris led market gains
- Bond yields edged higher following mixed U.S. economic data
- Oil prices rose amid geopolitical uncertainty tied to Venezuela
- Global markets finished mixed across Asia and Europe
Wall Street Flat as Defense Stocks Surge
Deep Look
NEW YORK — A calm trading session on Wall Street Thursday concealed powerful gains in defense-related stocks, as investors reacted to renewed calls from President Donald Trump for a dramatic expansion of U.S. military spending. While the broader market barely moved, weapons makers and military equipment suppliers surged, lifting a narrow slice of the market sharply higher.
The S&P 500 was virtually unchanged in morning trading, following its first decline in four sessions and remaining close to the record high it set earlier in the week. The Dow Jones Industrial Average rose 139 points, or 0.3%, while the Nasdaq Composite slipped 0.5%, weighed down by weakness in technology shares.
Investors were digesting a mix of economic signals. Weekly applications for U.S. unemployment benefits increased, hinting at potential softening in the labor market, though the rise was in line with forecasts. Other reports showed stronger-than-expected productivity gains among U.S. workers and a surprise narrowing of the U.S. trade deficit in October. Together, the data painted a mixed picture of the economy, contributing to restrained trading.
In the bond market, yields moved higher, with the 10-year Treasury yield climbing to 4.17% from 4.15% late Wednesday. Rising yields often pressure growth stocks, helping explain the Nasdaq’s underperformance.
Defense stocks, however, stood out sharply. Shares of Northrop Grumman jumped 6.9%, Lockheed Martin surged 7.4%, and L3Harris Technologies also gained 7.4%. The rally followed Trump’s comments that he wants to boost U.S. military spending to $1.5 trillion by 2027, up from roughly $901 billion, as part of his vision for what he described as a “Dream Military.”
The gains more than erased losses from the prior session, when Trump criticized defense contractors for being too slow in producing military equipment. One exception was RTX, which rose a more modest 3.4% after Trump singled it out as lagging behind competitors in ramping up production.
Adding pressure to the defense industry, Trump signed an executive order Wednesday directing the Pentagon to ensure future contracts include provisions preventing contractors from buying back their own stock during periods of underperformance on government contracts. The move underscores a tougher stance toward defense firms even as spending expectations rise.
Outside the defense sector, Constellation Brands climbed 6.1% after reporting quarterly profits that exceeded Wall Street expectations, making it one of the day’s notable non-defense gainers.
Oil prices also moved higher, continuing a volatile stretch following Trump’s recent actions involving Venezuela. Benchmark U.S. crude rose 1.5% to $56.85 per barrel, while Brent crude increased 1.6% to $60.93. Venezuela holds some of the world’s largest oil reserves, and any future increase in production could weigh on prices. However, analysts note that years of underinvestment mean it would take billions of dollars to significantly boost output.
Geopolitical concerns extended beyond Venezuela. Trump has warned of “troubled and dangerous times,” recently floating the idea of taking control of Greenland for national security reasons and suggesting possible military operations in Colombia. Such rhetoric has added to uncertainty across energy and defense markets.
Overseas, stock markets posted modest gains across Europe after a weaker showing in Asia. Japan’s Nikkei 225 fell 1.6%, one of the sharpest global moves, while Hong Kong’s Hang Seng Index declined 1.2%.
Overall, Thursday’s session highlighted a familiar Wall Street theme: while headline indexes appeared calm, powerful undercurrents — driven by politics, geopolitics, and sector-specific news — were shaping sharp moves beneath the surface.
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