Zinger Key Points
- Hamas accepts a draft agreement for a ceasefire in Gaza that includes the release of several hostages.
- Defense stocks move lower following the ceasefire reports despite a strong session from broader indices.
Defense stocks are moving slightly lower Wednesday after Israel and Hamas verbally agreed on a ceasefire in Gaza.
What Happened: Hamas accepted a draft agreement on Wednesday for a ceasefire in Gaza that includes the release of several hostages, according to multiple reports.
The agreement follows months of negotiations and paves the way for a potential end to the ongoing war in the Middle East that began about 15 months ago. The verbal agreement also comes just days before President-elect Donald Trump’s inauguration.
“We have a deal for the hostages in the Middle East. They will be released shortly. Thank you!” Trump said in a post on Truth Social.
The deal reportedly includes a six-week ceasefire and the release of 33 Israeli hostages in exchange for the release of Palestinian prisoners. Israel still needs to ratify the deal, but a vote is expected by Thursday.
Related Link: Israel, Hamas Agree To Cease-Fire Deal With Hostage Exchange: What You Need To Know
Defense stocks including Lockheed Martin Corp LMT, Northrop Grumman Corp NOC and RTX Corp RTX moved lower as the ceasefire reports surfaced despite a strong session from broader indices. The Global X Funds Global X Defense Tech ETF SHLD and the SPDR S&P Aerospace & Defense ETF XAR also pulled back from highs on the news.
At the time of writing, Lockheed Martin shares were down about 0.7%, while Northrop Grumman and RTX shares were down about 0.8%. It’s worth noting that the SPDR S&P 500 SPY was up 1.77% at last check.
Defense stocks have benefitted from the ongoing war in the Middle East with the Global X Funds Defense ETF having gained more than 35% over the past year, according to Benzinga Pro. Defense stocks tend to rally in periods of elevated conflict given their heavy reliance on government contracts.
Energy stocks including BP P.L.C BP, Chevron Corp CVX and ConocoPhillips COP also pulled back slightly on the ceasefire news, but bounced back pretty quickly.
The United States Oil Fund USO hit new 52-week highs on Wednesday on continued momentum from last week after the U.S. announced its most extensive sanctions on Russian oil exports to date.
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Photo: courtesy of Lockheed Martin.
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