One social media post tanked defense stocks. Another sent them soaring. Following the capture of Venezuelan President Nicolás Maduro and renewed Greenland threats, President Trump announced a $1.5T defense budget for 2027 — a 50%+ jump from current spending. The proposal would build what Trump calls a “dream military,” though it comes with strings attached for contractors.

• Major US contractors surged on the news Thursday — with Northrop GrummanNOC
  , Lockheed MartinLMT
  , and RTXRTX
  initially climbing 8.3%, 7.9%, and 4.8%, respectively.
• Trump claims tariff revenue will “easily” cover the increase — though the CBO estimates tariffs cover less than half, with analysts skeptical given the narrow House GOP majority.

Not so fast: Hours before announcing the spending bonanza, Trump issued an executive order blocking stock buybacks and dividends for defense contractors until they deliver on time and on budget. Amid the resulting sell-off, RTX was singled out for underinvesting in plants and equipment, with Trump threatening to end its Pentagon contracts entirely. It’s a classic carrot-and-stick play — contractors get a bigger pie, but only if they eat their vegetables first.