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Defense Stocks Soar After Trump’s $1.5 Trillion Budget Proposal

Rising oil and firmer Treasury yields reinforced a rotation toward defense and energy ahead of Friday’s jobs report.

Overview

  • Major U.S. indexes ended mixed, with the S&P 500 flat, the Dow up 0.6% and the Nasdaq down 0.4% as investors trimmed big tech exposure.
  • An aerospace and defense gauge set a record high after the president called for a 2027 military budget of $1.5 trillion, far above the $901 billion approved for 2026.
  • The White House said the president signed an executive order directing the Pentagon to include contract terms that curb stock buybacks during contractor underperformance.
  • Oil rebounded, with WTI settling near $57.76 and Brent near $61.99, as traders tracked Venezuela developments following the U.S. capture of Nicolás Maduro over the weekend.
  • The 10-year Treasury yield hovered around 4.18% as markets awaited the December jobs report and a possible U.S. Supreme Court ruling on tariffs.