Defense stocks rose on Monday after Politico reported that President Donald Trump is asking for a $750 billion defense budget in fiscal 2020. The group of defense stocks is one of the only bright spots in a widespread market sell-off.
Trump's request to Defense Secretary Jim Mattis represents a higher-than-expected budget. The president has swung back-and-forth on the issue of defense spending — calling his Cabinet earlier this year to cut spending across all agencies by 5 percent while also signing in August a colossal defense spending bill.
Shares of Raytheon, Lockheed Martin and Northrop Grumman closed up more than 3 percent each in trading. General Dynamics also gained 2.9 percent, while Boeing rose off the lows of the day to end 1 percent higher.
The president declared last week that U.S. defense spending is "crazy!" The president said that the United States, China and Russia would "at some time in the future" begin talks to end what he described as an uncontrollable arms race.
The $750 billion would be even more than the $733 billion request that the Pentagon had been expected to make for fiscal year 2020. It is also well above a $700 billion figure Trump cited in October.
A U.S. official told Reuters that Mattis had discussed the budget with Trump in recent days and outlined the risks of flat defense spending.
— Reuters contributed to this report.