(April 2): US defence stocks have declined even as the Iran war drags on, indicating that the typical "buy-on-conflict" trade had largely peaked in the weeks before in anticipation of tougher action by President Donald Trump. "We saw gold and oil and defence rally, part of the reason was messages from the administration, when Trump was sending the armada to the Middle East. Bianco said he began reducing his "overweight" position on defence stocks before the Middle East conflict began. Reuters reported in the weeks leading up to the war that the US was building up forces in the Middle East and preparing for a weeks-long operation if diplomacy failed. The Trump administration is also pressuring defence firms to prioritize production over shareholder payouts, exacerbating uncertainty around capital returns.

Source: The Edge Markets April 02, 2026 12:55 UTC