Defense Stocks Fall After Democrats Win Congress, Putting 2027 Budget in Focus

Defense stocks fell Wednesday after Democrats won control of both chambers of Congress, as investors assessed whether the new majority would challenge President Donald Trump’s defense spending priorities. Lockheed Martin shares fell 3.6% in Wednesday’s session. L3Harris lost more than 2%, while RTX Corporation and Northrop Grumman each dropped more than 3%. The moves followed Tuesday’s midterm results and drew attention to federal budget choices that shape demand for defense contractors’ products and services. Each company has significant government exposure. About 70% of Lockheed Martin’s sales come from the U.S. government, while U.S. government sales made up 75% of L3Harris’ fiscal 2025 revenue. L3Harris’ figure includes sales through prime contractors, including foreign military sales. RTX and Northrop Grumman also generate significant sales through U.S. government contracts.

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