LMT Stock Whipsaws After Trump Bans Buybacks, Then Calls For $1.5 Trillion Military Budget

Shares of defense contractor Lockheed Martin Corp. (NYSE:LMT) whipsawed on Tuesday, witnessing a steep decline during the regular session, before mounting a recovery overnight, in response to a pair of social media posts by President Donald Trump, made in quick succession.

LMT Stock Whipsaws

Lockheed Martin shares were down 4.82% on Tuesday, closing at $496.87, after Trump made a post on Truth Social criticizing America’s defense contractors.

Trump took aim at the industry’s “massive” dividends and stock buybacks, which he said were made at the expense of investments in plants and equipment, resulting in slow deliveries of vital military equipment. He further warned that maintenance of military equipment was “far too slow” and insisted it must be “on time” going forward.

He also targeted executive pay, calling compensation packages “exorbitant and unjustifiable,” and declared that “no executive should be allowed to make in excess of $5 million” until production and maintenance problems improve.

In a sweeping statement, Trump announced that he “will not permit Dividends or Stock Buybacks for Defense Companies until such time as these problems are rectified.”

The reaction was swift, with most defense stocks ending the day in the red, with the iShares U.S. Aerospace & Defense ETF (BATS:ITA) dropping 1.65% during the day.

Trump Proposes ‘$1.5 Trillion’ Military Budget

A few hours later, in another post on Truth Social, Trump called for a historic boost to the U.S. defense budget, saying, “Our Military Budget for the year 2027,” should be $1.5 trillion, instead of $1 trillion, while adding that it was essential for building a “dream military.”

This sparked a reversal in defense stocks, with Lockheed Martin now up 6.3% overnight.

The LMT stock scores poorly on Momentum and Quality in Benzinga’s Edge Stock Rankings, but has a favorable price trend in the short, medium and long terms. Click here for deeper insights into the stock, its peers and competitors.

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