Northrop Grumman and major defense contractors declined on Monday, June 15. The sell-off followed President Trump’s announcement of a tentative 60-day peace agreement between the United States and Iran.
The deal includes the immediate reopening of the strategic Strait of Hormuz. This move signals a significant de-escalation of military tensions in the region.
Broader equity markets surged to record highs as oil prices fell. However, the prospect of sustained peace reduced the outlook for military hardware demand.
A Barron’s report suggests the development has officially pushed defense stocks into a bear market.