As if the ongoing Israel-Hamas and Russia-Ukraine wars weren't causing enough geopolitical uncertainty across the world, Iran's first-ever direct attack on Israel over the weekend has further raised the stakes. As Israel mulls a potential retaliation, President Biden took to the Wall Street Journal this week to make the case for funding U.S. allies in Ukraine and Israel.
While these geopolitical flashpoints add to broader market volatility, investors might consider allocating some capital to defense stocks. Though defense spending accounted for almost 3.6% of GDP in 2023, and is projected to reach $1.07 trillion by 2034, brokerage firm Wells Fargo remains cautious about buying stocks in the industry on the Iran catalyst.
