The shares of US defence contractors have risen to multi-year highs following an announcement by US President Donald Trump that he was demanding a 50 per cent increase in defence spending for 2027.
In a post on his Truth Social site late yesterday, Trump wrote: “After long and difficult negotiations with Senators, Congressmen, Secretaries, and other Political Representatives, 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.”
Trump added that would allow the US to build the “dream military” that would keep the country safe and secure.
He also wrote that the spending increase should be financed with the “tremendous income” that his tariffs were bringing in. This extra funding would allow the US to increase its defence capabilities while still paying down its debt, he added.
While the President proposes the country’s budget only Congress has the legal authority to allocate the money. The 2027 US budget should pass Congress by September 30 at the latest.
Following Trump’s post, shares of RTX, formerly known as Raytheon, were up more than 5 per cent in pre-market trading today, set to reach an all-time high of $195.
Shares of military aircraft manufacturer Lockheed Martin jumped 7 per cent to $530 per share. Similarly, shares of aerospace company Northrop Grumman were up 7 per cent to $619.
Shares of General Dynamics, meanwhile, were up more than 4 per cent in pre-market trading.
The gains marked a sharp turnaround after a previous Trump post had sent defence shares plummeting shortly before the US markets closed yesterday.
In that post, the President had written he would no longer tolerate that defence contractors were paying “massive dividends” and buying back shares “at the expense and detriment of investing in plants and equipment”.
He also criticised executive pay packages for managers of defence companies and announced plans for a pay ceiling of $5 million (€4.28 million) for executives until they built “new and modern production plants”.
“Military equipment is not being made fast enough,” Trump griped.
