U.S. defense stocks moved lower on Thursday after an interim accord between the United States and Iran became effective earlier than expected.
Market declines were broad among major contractors. L3Harris fell about 6%, while Northrop Grumman declined 6%. Lockheed Martin eased around 5%, and General Dynamics slipped roughly 3%. Boeing was down about 2%, and RTX Corp declined around 4%.
The move followed the signing of a memorandum of understanding on Wednesday by President Donald Trump alongside Iran's President Masoud Pezeshkian. The agreement took effect two days earlier than had been anticipated.
Vice President JD Vance is scheduled to represent the United States at a formal ceremony in Switzerland on Friday to confirm the interim accord. He stated that Thursday marked the start of a 60-day negotiation period intended to produce a final settlement to the war.
The market reaction on Thursday reflected traders' reassessment of near-term geopolitical risk as the interim agreement moved into the confirmation phase and a defined negotiation window began. The declines were concentrated in the defense sector, as shown by the percentage moves in the companies named above.
Details in public reports affirmed the timing of the signing, the accelerated effective date and the upcoming ceremony where U.S. representation will be present to confirm the accord. The 60-day period noted by the vice president signals a defined timeline for discussions aimed at concluding a final settlement.
Contextual note: The article reports the market reaction and the official steps described by U.S. officials following the memorandum. It does not add or infer outcomes beyond the statements about the signing, effective date, the planned ceremony and the 60-day negotiation period.