President Donald Trump has championed military strength and pushed for cost-cutting measures at the Department of Defense|DoD photo by Lisa Ferdinando
President Donald Trump’s recent remark that he would like to have conversations with Russia and China about reducing their military spending and would like the two countries to impose limits on their nuclear arsenals in the future sent defense stocks tumbling this week.
Speaking at the White House on Thursday, Trump argued that the US defense budget of nearly $1 trillion could be better spent elsewhere.
Markets reacted swiftly
Since the president’s comments, defense contractor Lockheed Martin’s stock fell nearly 5%, Northrop Grumman dropped 7% and RTX slid 4%.
Investors are grappling with mixed signals from Trump, who has championed military strength and pushed for cost-cutting measures at the Department of Defense (DoD), which employs over 3 million people. New Defense Secretary Pete Hegseth and the Elon Musk-led Department of Government Efficiency (DOGE) oversee the efforts.
However, skepticism remains over whether China and Russia would agree to reduce military investments, given that US defense spending ($850 billion) far exceeds theirs.
Trump also suggested reintegrating Russia into the Group of Seven (G7) with Germany, Italy, Japan, Canada, France, the US and the UK. He says it could prevent geopolitical tensions.