TLDR
- Trump announced a five-day halt to U.S. military strikes on Iranian energy infrastructure
- U.S. and Iran held talks Sunday with “major points of agreement,” per the president
- Defense stocks were mixed — NOC and LMT down under 1%, GD and L3Harris slightly up
- The iShares Aerospace & Defense ETF has fallen ~9% since the Iran conflict began
- Analyst flags fiscal concerns and Congressional budget gridlock as added headwinds for the sector
President Donald Trump posted on Truth Social Sunday that the U.S. had instructed the Department of War to postpone military strikes on Iranian power plants and energy infrastructure for five days.
🚨 President Donald J. Trump calls for a pause on all military strikes against Iranian power plants and energy infrastructure for a five-day period, subject to the success of the ongoing meetings and discussions. pic.twitter.com/N15CTRvikT
— The White House (@WhiteHouse) March 23, 2026
Trump said talks took place on Sunday, led by Middle East envoy Steve Witkoff and Jared Kushner. He told reporters Monday the two sides had reached “major points of agreement” and that a deal could come soon if talks continued to progress.
Northrop Grumman Corporation, NOC
The announcement pushed the S&P 500 up around 1.4% and the Dow Jones up roughly the same. Brent crude oil futures dropped 6.7% to $99.27 a barrel.
Defense stocks didn’t get the same lift. Northrop Grumman (NOC) and Lockheed Martin (LMT) were each down less than 1% in early Monday trading. General Dynamics (GD) and L3Harris Technologies edged up less than 1%.
The sector has been a quiet underperformer through the conflict. As of Monday’s open, the iShares Aerospace & Defense ETF was down roughly 9% since fighting in Iran began — around 4 percentage points behind the S&P 500 over the same stretch.
Budget Concerns Adding Pressure
Capital Alpha Partners analyst Byron Callan flagged fiscal headwinds in a Sunday note. “Talk of a $200 billion supplemental and a $1.5 trillion DoD budget has not helped U.S. defense sentiment,” he wrote.
Callan also pointed to the standoff over Department of Homeland Security funding as a factor in how investors are reading Congress’s ability to push through larger defense spending increases.
The uranium question is still unresolved. One key objective for the U.S. in its conflict with Iran remains Tehran’s stockpile of highly enriched uranium.
To qualify as highly enriched, uranium must contain more than 20% of the U-235 isotope. Iran is believed to hold material at 60% U-235 — short of the 90% threshold for nuclear weapons, but well above civilian use levels.
Iran Talks Continue Monday
Trump confirmed Monday that negotiations would continue through the day. He said a deal could come “very soon” if progress holds.
The five-day pause on military strikes gives both sides a window. What comes out of the current talks — particularly around Iran’s uranium stockpile — will likely shape how investors read the defense sector in the near term.
Northrop Grumman stock was down about 1.3% in early Monday trading, while Lockheed Martin was off 0.5%. General Dynamics gained 0.93%.
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