Lockheed Martin (LMT) and other defense stocks soared on Monday, March 2nd, following US-Israeli military strikes on Iranian military bases in an operation called “Operation Epic Fury". The coordinated attacks, ordered by President Trump, targeted Iranian military infrastructure and resulted in the reported death of Iran's Supreme Leader Ayatollah Ali Khamenei. In response, Iran launched missiles and drones toward Gulf nations, further escalating regional tensions.
The defense sector saw broad gains, with Lockheed Martin shares rising nearly 7% in premarket trading. Other major players also experienced increases, including Northrop Grumman, RTX, General Dynamics and AeroVironment. The iShares U. S. Aerospace and Defense ETF gained 35% since the initial June Iran strike. This surge reflects investor expectations that heightened conflict will lead to increased defense spending and contracts.
The strikes caused Dow futures to tumble more than 800 points as investors moved into defense stocks, anticipating accelerated government spending on military hardware and systems. Stifel analyst Jonathan Siegmann noted that defense spending was already set to surge in 2026, and a protracted war with Iran would make such spending more urgent.
Lockheed Martin's F-35 fighter jets played a central role in the strikes, further boosting the company's stock. The F-35 is Lockheed Martin's flagship product and largest revenue driver, described as the most lethal and connected fighter jet in operation. The company recently announced successful flight tests of an AI-enhanced Combat Identification capability built into the F-35, adding to investor confidence.
