Defense Stocks Rally on US Military Action in Venezuela
Lockheed, RTX, and Northrop Grumman surge as investors anticipate increased military spending following a decisive US operation that led to the capture of President Maduro.
Shares in major U.S. defense contractors surged in early trading on Friday after Washington announced a significant military operation in Venezuela, resulting in the capture of President Nicolás Maduro.
Lockheed Martin (LMT), the world's largest defense contractor, saw its stock jump over 6%, while missile and defense systems giant RTX Corp (RTX) climbed 5.5%. Northrop Grumman (NOC), maker of the Global Hawk surveillance drone, rose 5%, and General Dynamics (GD), which manufactures armored combat vehicles, gained 4.5%. The broader aerospace and defense sector, as tracked by the Invesco Aerospace & Defense ETF (PPA), was up nearly 5% on the news.
The market rally follows confirmation of "Operation Absolute Resolve," a decisive military action spearheaded by the U.S. Army's elite Delta Force. The operation took place at Fuerte Tiuna, Venezuela's primary military complex in Caracas, where Maduro was apprehended, according to live updates from CBS News. The news follows weeks of escalating tensions and a major U.S. military buildup in the region.
Investors are betting that the scale of the operation and the prospect of a sustained U.S. presence will lead to a significant increase in government spending to replenish military stockpiles. The consumption of munitions, from small arms ammunition to precision-guided missiles used in initial strikes, is expected to drive new orders for prime contractors like RTX.
Furthermore, the extensive use of air and sea assets suggests a heightened need for maintenance, logistical support, and potentially new platforms. This directly benefits companies like Lockheed Martin, manufacturer of the F-35 fighter jet, and Northrop Grumman, whose expertise in autonomous systems and surveillance is critical for modern military engagements. Satellite imagery reviewed by CBS News reportedly showed damage to key military installations, suggesting a need for significant U.S. observation and control efforts going forward.
The operation was the culmination of a multi-month naval and air presence in the Caribbean. Dubbed "Operation Southern Spear," the buildup began in late 2025 and involved an carrier strike group led by the USS Gerald R. Ford, as reported by the Associated Press. The stated mission was to combat narcotics trafficking, with Washington having previously designated Maduro's alleged "Cartel of the Suns" as a Foreign Terrorist Organization.
In a statement, President Donald Trump indicated that the U.S. would temporarily "run" Venezuela to stabilize the country and its oil production, a move that implies a potentially long-term and resource-intensive commitment. While Secretary of State Marco Rubio clarified that direct governance was not the objective, he confirmed the enforcement of an "oil quarantine," a policy that will require significant naval and air assets to enforce. Analysts believe this will translate into sustained contracts for shipbuilding, maintenance, and surveillance for companies like General Dynamics, a leading manufacturer of naval ships.
While the immediate military objectives appear to have been met, the long-term strategic and economic implications are just beginning to unfold. For investors in the defense sector, the events in Venezuela represent a sudden and dramatic shift, potentially heralding a new cycle of increased government spending after years of relative peacetime procurement.