State Street SPDR S&P Aerospace & Defense ETF is trading 2.9% higher today as investors rotate into industrials and defense-related names amid escalating Middle East tensions and a sharp move higher in crude oil prices.
- Geopolitical risks, including fears of a wider conflict and the potential closure of the Strait of Hormuz, are boosting demand for aerospace, defense, and logistics stocks that dominate the sector.
- Markets are reassessing long-term defense spending needs and energy security as cyclical stocks catch a bid despite ongoing inflation worries.