U.S. defense stocks have fallen sharply since late summer 2026. The iShares U.S. Aerospace & Defense ETF (ITA) is down nearly 18% from its August highs, bringing it close to bear market territory. Lockheed Martin, RTX, and Northrop Grumman shares have also declined.
The sell-off comes as global demand for military hardware remains strong amid ongoing international conflicts. Analysts point to investor uncertainty ahead of the U.S. midterm elections as the main driver. Investors fear a shift in congressional power could stall previously anticipated increases in the national defense budget.