Defense Stocks Sink After Trump Orders Contractors To Halt Dividends, Buybacks
01/07/2026 03:45 PM • President Trump ordered U.S. defense contractors to immediately halt dividend payments and share buybacks, citing underinvestment in production and excessive executive compensation. Trump stated that dividends and buybacks will remain banned until companies build modern production facilities, accelerate equipment output, and improve maintenance quality. He also capped executive compensation at $5 million until production issues are resolved. The announcement triggered sharp declines across the defense sector, with major contractors and aerospace & defense ETFs falling significantly.
LMT - Stock declined 4.97% following Trump's order to halt dividends and buybacks. As a major defense contractor, the company faces restrictions on shareholder returns and executive pay, impacting near-term investor returns.
Investing.com • Itai Smidt