By Anita Hamilton

Shares of major defense contractors were mostly down Tuesday after the U.S. announced that Saudi Arabia is buying $142 billion in "state-of-the-art" warfighting equipment and services from U.S. defense firms.

The deal is part of $600 billion economic partnership announced earlier in the day as President Donald Trump visited the kingdom. The Saudis are buying equipment for air force and space capabilities, air and missile defense, maritime and coastal security, border security, and communication systems upgrades.

Shortly following the deal's announcement, shares of Lockheed Martin fell 1.5%, Northrop Grumman was down 0.6%, and General Dynamics dipped 0.2%. Meanwhile, shares of L3Harris were flat, while RTX (formerly Raytheon) stock rose 0.5%. The S&P 500 was up 0.9%.

Saudi Arabia already buys weapons from the U.S. Ongoing concerns about trade could be putting pressure on the defense stocks. That uncertainty could hurt sales overall for contractors such as Lockheed Martin and Northrop.

Another factor may be Tuesday's better-than-expected inflation report, which, combined with the tariff reprieve with China, may have investors eyeing other sectors after flocking to defense stocks earlier in the year, Argus Research analyst Kristina Ruggeri told Barron's in an email.

Write to Anita Hamilton at anita.hamilton@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

May 13, 2025 12:39 ET (16:39 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.