Trump Plans to Increase Military Spending to $1.5 Trillion
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 08 2026
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Source: NASDAQ.COM
- Military Budget Increase: President Trump plans to raise U.S. military spending by approximately 50% to $1.5 trillion by 2027, which is expected to significantly boost growth in the defense sector and enhance the market performance of related companies.
- Defense Stocks Surge: Following this announcement, Northrop Grumman (NOC) shares rose over 10% and Lockheed Martin (LMT) increased by more than 8%, indicating a positive market reaction to increased defense spending that may attract more investor interest in the sector.
- Supportive Economic Data: U.S. December Challenger job cuts fell 8.3% year-on-year to 35,553, marking a 17-month low, which reflects a strong labor market and provides a favorable economic backdrop for increased defense spending, potentially influencing Federal Reserve policy.
- Market Reaction: While the broader stock market faced pressure from profit-taking in chipmakers and software firms, the robust performance of defense stocks demonstrates optimistic market expectations regarding Trump's policies, which may drive future investment and growth in the industry.
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About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
