Defense Stocks Muted as Trump Orders Nuclear Test Resumption
Order to end 33-year moratorium on nuclear testing could signal long-term spending hikes for Northrop Grumman, Lockheed Martin, and other defense contractors.
Major U.S. defense contractors saw a muted response in the market Wednesday, even as former President Donald Trump issued a directive ordering the Pentagon to “immediately” resume the testing of nuclear weapons, a move that would end a three-decade moratorium.
The order, announced via a post on his Truth Social platform, signals a significant strategic shift that could unlock billions in future government spending on nuclear arsenal modernization. Despite the potentially lucrative long-term implications, key defense stocks remained largely unmoved. Northrop Grumman (NOC), maker of the B-21 Raider stealth bomber, closed down 1.69% at $584.99. Lockheed Martin (LMT), a primary contractor for strategic missile systems, edged down 0.09% to $485.33, while RTX Corp (RTX) fell 1.29% to $176.36.
Trump’s directive breaks with a U.S. policy that has been in place since 1992, the last time the nation conducted an explosive nuclear test. In his announcement, the former president cited the need to counter the growing nuclear programs of Russia and China. "Because of other countries' testing programs, I am ordering our Department of War to immediately begin testing our Nuclear Weapons on an equal basis," Trump stated, according to reports.
The directive puts a spotlight on companies central to the maintenance and modernization of the U.S. nuclear triad—a combination of land-based ballistic missiles, submarine-launched missiles, and strategic bombers. Northrop Grumman is the prime contractor for the Sentinel intercontinental ballistic missile program, a project valued at over $100 billion that is designed to replace the aging Minuteman III system. Lockheed Martin develops and produces the Trident II D5 submarine-launched ballistic missiles used by the U.S. Navy's Ohio-class submarines.
The lack of an immediate surge in stock prices may reflect the complex and lengthy nature of defense appropriations. Large-scale spending initiatives require congressional approval and can take years to translate into formal contracts and revenue for these firms. Investors may be waiting for a concrete response from the Pentagon and clearer signals from Capitol Hill about budgetary allocations before pricing in the full impact of the policy shift.
Still, the order serves as a strong indicator of future priorities. A resumption of testing would likely accelerate and expand existing modernization programs, creating a durable tailwind for the sector. Analysts will be closely watching for any formal requests from the Department of Defense for increased funding or expedited development timelines related to strategic weapons systems.
While the market's immediate reaction was subdued, the long-term outlook for the aerospace and defense sector has been fundamentally altered. The pivot away from a decades-long policy signals a renewed focus on strategic deterrence, a domain where companies like Northrop Grumman, Lockheed Martin, and RTX are indispensable partners to the U.S. government.