Defense and aerospace drive industrial market cap in 2026
Industrial companies are cyclical businesses that generally do well when the economy is strong, but are often hit hard during downturns. Some industrial companies are less vulnerable than others, though.
Defense contractors with government contracts and aerospace companies are often better equipped to handle periods of economic uncertainty. Not coincidentally, they make up a sizable portion of the biggest industrial companies.
The Trump administration's import tariffs also pose a potential problem for industrial companies, though their status often changes. Still, considering how essential top industrial companies are to the economy, it makes sense to have some in an investment portfolio.