Al Root

President Donald Trump announced his Golden Dome missile-defense shield for the U.S. on Tuesday. Defense stocks rallied early on Wednesday.

There should be additional business for just about everyone.

"I promised the American people that I would build a cutting-edge missile-defense shield to protect our homeland from the threat of foreign missile attack, and that's what we're doing," said President Trump from the Oval Office with several in attendance, including Defense Secretary Pete Hegseth. "Once constructed, the Golden Dome will be capable of intercepting missiles, even if they launched from the other side of the world and [space]."

Hypersonic, ballistic, and cruise missiles can all be targeted and "knocked out of the air," added the president, who plans to move fast. He wants the dome operational by the end of his term. The projected cost is only $175 billion, which looks "suspiciously low," according to Vertical Research Partners analyst Rob Stallard.

Still, higher costs won't hurt the defense sector.

No companies were called out specifically by the president, but "across-the-board contractor involvement" is expected, wrote Jefferies analyst Sheila Kahyaoglu on Tuesday. "The press conference made reference to a lot of American companies being involved, [including] "Silicon Valley" and defense tech start-ups."

Silicon Valley and start-ups likely include Anduril, a leader in autonomous and artificial-intelligence-trained defense technology. Anduril isn't publicly traded; shares of the large defense prime contractors are moving on Wednesday morning.

J.P. Morgan analyst Seth Seifman noted that L3Harris Technologies was mentioned by Sen. Jim Banks (R., Ind.) at the event. That seems to be helping. L3Harris shares were up 3.1% at $238 in premarket trading, while S&P 500 and Dow Jones Industrial Average futures were down 0.9% and 0.8%, respectively.

Shares of Lockheed Martin, Northrop Grumman, RTX, and General Dynamics were up 0.5%, 0.2%, 1.4%, and 0.2%, respectively. RTX might be getting a bigger bump because of its history in missile defense. It makes Patriot missiles.

From the Nov. 5 election through Tuesday's close, shares of those five contractors are down an average of 2%, while the S&P 500 has gained about 3%. Lockheed shares have been the weakest, down 13%. Only shares of RTX, which also benefits from a strong commercial aerospace business, were up, with a gain of 15%.

Investors have been worried that a focus on deficit reduction could pressure military spending. Still, President Trump's initial budget request, unveiled in May, which included $25 billion for the Golden Dome, topped $1 trillion, reassuring investors that he is serious about peace through strength.

Write to Al Root at allen.root@dowjones.com

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May 21, 2025 08:06 ET (12:06 GMT)

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