Defense contractors rallied Monday after White House officials said President Donald Trump’s upcoming budget will propose a $54 billion increase in military funding.
Lockheed Martin (NYSE:LMT), the top supplier to the Pentagon, nearly surpassed its 52-week high in mid-morning trading. Shares rose 1.6% to $268.32 a share. Since Election Day, Lockheed Martin has gained 11.9%. Northrop Grumman (NYSE:NOC), Raytheon (NYSE:RTN) and Boeing (NYSE:BA) also spiked in Monday morning trade.
Many defense stocks have been up sharply since Election Day. Back in November, analysts predicted that a Trump victory would propel defense contractors, especially companies that build jets, tanks, ships and other heavy equipment.
The budget, which will be presented to Congress soon, will offset increases for the military with budget cuts across the rest of the federal government, according to FOX News. The White House is reportedly planning to cut funding from the EPA and State Department budgets.
Trump’s budget plan would allocate a total of $603 billion for the Pentagon, up from the current cap at $549 billion. The $54 billion increase would be approximately 3% more than former President Barack Obama’s proposed budget for the military in fiscal year 2018.
According to a recent Fox News poll, 58% of registered voters believe the U.S. military is stretched too thin. A quarter of the poll’s respondents said the government spends the right amount on the military. Another 45% believe the military spends too little, while 25% think it’s too much.