Defense stocks have fallen as investors fear a Democratic win in the midterms could block President Trump's plan to raise annual defense spending from $1 trillion to $1.5 trillion, a $500 billion increase that requires congressional approval. The iShares US Aerospace and Defense ETF, the sector's largest fund, fell 16% from early July to mid-October, while the S&P 500 rose 3.5%. Analysts say projects bearing Trump's name, such as the 'Golden Dome' and 'Trump class' battleships, could be at risk as defense spending has become a partisan issue. Northrop Grumman and L3 Harris are down 35% and 36% since early March, and Lockheed Martin is down more than 20% from its peak then, despite the Russia-Ukraine and Middle East conflicts.
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