Defense stocks on Monday pared their early gains ahead of War Secretary Pete Hegseth's gathering of top U.S. military generals reportedly scheduled for Tuesday. President Donald Trump said he will also be in attendance.
Pete Hegseth, head of the recently renamed Department of War, last week ordered roughly 800 U.S. military generals and admirals from the U.S. and across the globe to report to Quantico, Va., for a Tuesday meeting. The senior military leaders were not informed about the purpose of the meeting beforehand, and few details have been made available to the public so far.
Hegseth is expected to deliver a speech to the gathering, which will likely focus on his definition of the "warrior ethos," or a more aggressive military, grooming and other standards, Politico reported.
One military official told Politico that Hegseth wants to talk about how everyone "needs to row in the same direction," or face career consequences.
Trump on Sunday told NBC News that he plans to attend the gathering.
"It's really just a very nice meeting talking about how well we're doing militarily, talking about being in great shape, talking about a lot of good, positive things," Trump said. "We have some great people coming in and it's just an 'esprit de corps'. That's all it's about. We're talking about what we're doing, what they're doing, and how we're doing it."
New Defense Strategy
Meanwhile, the Pentagon's new National Defense Strategy appears to primarily focus on protecting the homeland and Western Hemisphere, reversing from the military's yearslong mandate to deter China, according to a draft obtained by Politico. The draft of the Defense Strategy places domestic and regional missions above countering adversaries like Beijing and Moscow. However, Hegseth could still alter those plans.
The Pentagon in recent months has activated thousands of National Guard troops to support law enforcement in Los Angeles and Washington. The War Department has also dispatched multiple warships and F-35 fighters to the Caribbean in an attempt to stem the flow of drugs to the U.S.
The U.S. in September reportedly destroyed three Venezuelan boats in international waters, which the Trump administration has claimed without evidence were operated by gang members and narco-terrorists. At least 17 people have been killed in the missile strikes, according to reports. Venezuela's defense minister, Vladimir Padrino said the attacks and U.S. naval deployments amount to a "non-declared war," BBC reported.
NBC News on Friday reported that U.S. military officials are drawing plans to conduct military strikes on drug targets in Venezuela, which could begin in a matter of weeks, unnamed sources said.
Missile Production Ramp-Up
In another development affecting defense stocks, the Pentagon has urged missile suppliers to double or even quadruple production in an effort to refill stockpiles to prepare for a potential future conflict with the likes of China, the Wall Street Journal reported Monday.
Hegseth and Gen. Dan Caine, chairman of the Joint Chiefs of Staff, in June met with various defense executives and weapons suppliers to accelerate munition production. The likes of Lockheed Martin and RTX's Raytheon have added workers, expanded factory floors and started bolstering their spare parts inventories.
However, an expedited timeline may not be feasible. Individual missiles can take two years to assemble, as well as several months and hundreds of millions of dollars to test and qualify the munitions. Although the Trump administration's Big, Beautiful Bill provided $25 billion in five-year munitions funding, some analysts told the WSJ that the Pentagon's missile targets would cost tens of billions more.
Defense Stocks
LMT stock and RTX rose modestly Monday. AeroVironment advanced 2.5% while Kratos Defense gained more than 2%.
Northrop Grumman reversed to ease a fraction. NOC stock is climbing toward a 600.99 buy point for a flat base.
Textron rose less than 1%, while TransDigm reversed to slide less than 1%.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
