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Market Data Table

Breakfast News: Defense Stocks Whipsaw

January 8, 2026

Wednesday's Markets
S&P 500 6,921 (-0.34%)
Nasdaq 23,584 (+0.16%)
Dow 48,996 (-0.94%)
Bitcoin $91,108 (-2.37%)

Chart comparing the S&P 500's stock performance over the past decade to those of RTX, Lockheed Martin, and Northrup Grumman.

1) Trump Threatens Defense Sector Crackdown

Social media posts by President Donald Trump late yesterday initially called for caps on dividends and stock buybacks at major U.S. defense contractors, followed by stating a desire to increase U.S. defense spending by over 50% to $1.5 trillion in 2027.

"Defense contractors are currently issuing massive dividends to their shareholders … at the expense and detriment of investing in plants": RTX (NYSE:RTX) was singled out by Trump as putting the desires of shareholders ahead of the military, with a call for limiting dividends, stock buybacks, and capping executive pay at $5 million.
"This will allow us to build the 'Dream Military' that we have long been entitled to": Trump's initial comments drove defense stocks to close Wednesday at around 5% lower, but the move completely reversed on later posts related to higher sector spending, causing a 6% jump for Lockheed Martin (NYSE:LMT) and a similar pre-market move for Northrop Grumman (NYSE:NOC).

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2) GMED and STZ Pop on Results, JEF Struggles

Recommended by Team Rule Breakers in Stock Advisor, Globus Medical (NYSE:GMED) rose over 9% ahead of the opening bell thanks to preliminary Q4 results showing 25% revenue growth year over year and 2026 guidance raised above expectations. The stock has narrowly beaten the S&P 500 since the July 2024 SA recommendation.

Contrasting results for retail and finance: Constellation Brands (NYSE:STZ) rose almost 2% in pre-market trading following quarterly revenue beating estimates despite a slight sales dip in beer and spirit volumes. Jefferies (NYSE:JEF) fell over 3% ahead of the market opening after results showed a $30 million pre-tax loss related to the collapse of First Brands Group.
Dividend yield of 2.06% versus 1.19% for the S&P 500: Dividend Investor rec RPM International (NYSE:RPM) released earnings before the market opened, with the business reporting record Q2 sales, but the CEO warned of the impact of the government shutdown. The stock fell around 4% ahead of the opening bell.

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3) RVMD Set to Fall as AbbVie Denies Deal

AbbVie (NYSE:ABBV) denied a Wall Street Journal report that said it was in talks to buy Revolution Medicines (NASDAQ:RVMD), sending Revolution stock down as much as 14% ahead of the opening bell, having climbed 28.6% yesterday.

Cancer-focused biotech company doesn't have any products on the market yet: A deal would have reflected one of the largest healthcare acquisitions in years, with Revolution deemed to be a leader of innovation within the pancreatic cancer market, which is expected to grow 10x by 2035.
"AbbVie has proven that it can successfully navigate a difficult patent cliff": In October, Fool contributing analyst Keith Speights pointed to acquisitions as a way for AbbVie to deal with key patent expiries, noting "the company developed two successors to Humira that will together generate more revenue this year than Humira did at its peak."

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4) Your Take

Some defense contractors also have significant civilian aerospace, technology, or infrastructure businesses. Does a more diversified business model make these companies more or less attractive to invest in than pure-play defense specialists? Debate with friends and family, or become a member to hear what your fellow Fools are saying.

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