U.S & World Politics

U.S. Arms Companies See Stocks Soar After Soleimani Assassination

By Conrad Duncan

Major U.S. arms companies have seen their stock prices jump following the Trump administration’s assassination of Iranian military commander Qassem Soleimani.

The U.S. announced it was deploying nearly 3,000 extra troops to the Middle East on Friday as Iran vowed “severe revenge” on those responsible for Soleimani’s killing.

Iran’s expected retaliation means America’s long-running military presence in Iraq and the Middle East, which has financially benefited U.S. defense companies, is unlikely to wind down.

Defense technology company Northrop Grumman saw its stock up by 5.43 percent on Friday, while Lockheed Martin stock gained 3.6 percent and Raytheon stock rose by 1.5 percent.

The killing of Soleimani, a powerful military commander, has sparked fears of an all-out war between the U.S. and Iran, which would lead to increased military spending.

Donald Trump has said the airstrike was a defensive move and claimed Soleimani was “plotting imminent and sinister attacks on American diplomats and military personnel.”

“We took action last night to stop a war. We did not take action to start a war,” Mr. Trump said on Friday.

However, the assassination is a clear escalation in U.S.-Iran tensions and is likely to increase clashes between the two countries.

Tasnim news agency has quoted a senior commander in Iran’s Revolutionary Guards as saying the country “will punish Americans wherever they are within reach” in retaliation for Soleimani’s killing.

On Saturday, thousands of mourners in Baghdad, Iraq, marched in a funeral procession for the commander and chanted “America is the Great Satan” and “Death to America.”

The U.S. State Department has already urged all U.S. citizens to leave Iraq following a New Year’s Eve attack on an embassy in Baghdad by an “Iranian-backed” group.

Stock market analysts tracking the Defense market believe the escalated tensions in the region could lead to increases in military spending, according to The Washington Post.

Oil prices also surged following the strike on Friday, with U.S. crude oil climbing by 3.1 percent, while stocks fell broadly on Wall Street.

Roman Schweitzer, from the Cowen Washington Research Group, has said the airstrike is a “major escalation” that shifts U.S.-Iran tensions towards a direct confrontation.

“This is the equivalent of Iran killing the U.S. chairman of the joint chiefs of staff or the director of the Central Intelligence Agency and then taking credit for it,” Mr. Schweitzer wrote in an analyst note.

Sheila Kahyaoglu, an analyst for Jefferies Investment Bank, also wrote to investors that the threat of conflict in the Middle East “points to the broad threat profile that supports elevated levels of spending,” according to The Post.

Independent, January 4, 2020