Defense stocks took a tumble heading into 2025 as President Trump returned to the White House for his second term. Trump has stated his intent as a peacemaker to bring the wars in Ukraine and Israel to a halt. While this is good news to the people and the countries, it also means potentially less money will be spent on weapons and defense budgets, ultimately leading to a deceleration in revenue growth for defense contractors.
Add in the effects of the Department of Government Efficiency’s (DOGE) efforts to cut waste and fraud by scrutinizing defense contracts and budgets across all departments of the government, resulting in a swift sentiment reversal for the group.
