"Blue wave" risks loom as valuations stay elevated! US defense stocks under pressure collectively this year, sharp volatility feared ahead of midterm elections.

Zhito Finance APP has learned that after two years of unstoppable gains, U.S. defense stocks have hit a bottleneck this year. Since the start of the year, manufacturers ranging from tanks, fighter jets, and naval vessels to missiles, drones, and other defense technologies have all seen their stock performance significantly lag the broader market. The S&P Composite 1500 Aerospace & Defense Index, a gauge of the sector's stock performance, has fallen 13% since February 27 (the eve of the outbreak of the U.S.-Israel-Iran conflict). Over the same period, the S&P 500 has risen nearly 10%. The iShares U.S. Aerospace & Defense ETF, a fund tracking the industry, is now expected to post net outflows for two consecutive quarters, which would be the first such occurrence since 2023.