Defense Stocks Sink as the $1.5 Trillion Pentagon Plan Meets a Democratic Congress

Lockheed, L3Harris and Huntington Ingalls fell sharply the day after the midterms. Wall Street is now pricing which parts of the President's military buildup survive, and which do not.

By Clara Hughes

On a day when the Dow Jones Industrial Average jumped 1,534.89 points, or 2.97%, defense contractors went the other way. Shares of Lockheed Martin and L3Harris each fell 6.9% on Wednesday, Reuters reported. RTX dropped 3.1%, shipbuilder Huntington Ingalls lost 4.9%, and General Dynamics and Northrop Grumman also traded lower. The reason was the same one moving everything else in Washington: Democrats will control both the House and the Senate in January. At stake is the President's request for $1.5 trillion in defense spending for fiscal 2027, a figure Reuters compared with the roughly $901 billion level currently approved. That request was always going to need Congress. Now it needs a Democratic one. This is not a story about whether America should be strong. It is a story about which programs Wall Street thinks will make it through the next two years, and why.