Over the past week, developments in the Middle East have caused a noticeable uptick in stock prices, particularly for some key holdings. Recently, I’ve discussed Axon Enterprise and RTX Corp, both prominent names in the aerospace and defense sectors. A month ago, they appeared ready to break out, and, well, that’s exactly what happened. Shawn is also aiming to accelerate sector rankings and address some aspects of geopolitical impacts. Hope your week is going well.
As of June 16, 2025, the sector rankings reveal that 116 companies are performing well. The top industry appears to be energy, which is quite telling, as geopolitical situations often create quick fluctuations in energy and aerospace stocks. I’ve observed this trend many times, especially with escalations in Ukraine, conflicts in Israel, and currently, events regarding Iran. For energy firms, any disruption in oil supply chains or uncertainty about resource availability typically causes crude and natural gas prices to rise. Just last Friday, WTI prices surged 7% after an incident in Iran. Aerospace and defense stocks generally thrive during times like these, benefiting from heightened defense spending and security concerns, often outperforming broader market indices as investors flock to secure assets.
Currently, there are four key energy stocks: EQT, EXE, KMI, and WMB, all released on May 22. In the past month, both EXE and WMB have seen increases of 2.8% and 2.7%, respectively. Moving to aerospace, I’d mentioned Axon and RTX before, and it’s common in these situations to reassess defense spending assumptions—both for market forecasts and government agendas. Investors often react to these shifts, expecting robust revenues from defense contractors, especially as nations reconsider long-term defense strategies and invest in advanced technologies, like cybersecurity and drones. These adjustments in market expectations tend to impact stock prices in real-time.
Since my prior mentions of Axon and RTX in mid-May, it’s important to note that while the fundamental value of these stocks will be shaped by broader trends rather than isolated conflicts, markets generally normalize after initial uncertainty subsides. That said, energy and aerospace stocks often serve as solid hedges during times of geopolitical distress, providing some diversification when other sectors struggle. Investors might view these shares as a form of strategic insurance amid global volatility, rather than merely reactive investments.
I suspect we’re experiencing a long-term upward trend for defense-related stocks—something I find a bit disheartening considering the global situation. With ongoing conflicts in the Middle East, escalating tensions in Eastern Europe, and the persistent issue of China’s maneuvers regarding Taiwan, these names may need some leeway for recovery after market sell-offs. The chart shows volume spikes and notable RSI readings that some interpret as sell signals, but frankly, those opinions don’t hold much weight. RTX, a leading supplier in rockets and missile systems, seems poised to maintain an upward trajectory. Should conditions change, traders might consider using the $130 mark to recalibrate their exposure while leveraging a moving average around $120 for additional stop-loss strategies. I make it a point to update my sell stop orders regularly.
With Axon, I spotlighted it last month as I saw it as an ongoing breakout. For short-term traders, the $700 mark serves as a young pivot point. If it continues to break out, I’d adjust my stop-loss to just below $665, which indicates about a 15% drop. Below this level, things might get tricky, although I still believe it will remain on the recommended list. As for the charts, traders can map out their own strategies based on their timeframes and potential tax implications.
Remember, the opinions here are just that—opinions. They may not align with the views of larger corporations or media outlets. This content is meant for informational purposes. Always consider consulting with a personal financial advisor when making investment decisions, as all investments carry risks. The examples provided are illustrative and not definitive recommendations.
