US open: Stocks mixed, but defence sector lifts Dow after Trump comments

(Sharecast News) - US equity markets opened in mixed fashion on Thursday with defence stocks lifting the Dow Jones Industrial Average higher early on, while the S&P 500 stayed flat and the Nasdaq fell.

Defence stocks were performing well after US president Donald Trump called for his government's defence spending to reach $1.5trn, three times the current $500bn budget that the Pentagon is expected to receive this year.

"Despite this, there's a softer tone across US stock index futures this morning. Investors appear to be taking some risk off the table once again after a relatively strong start to the new year," said David Morrison, senior market analyst at Trade Nation.

The Dow was up 0.37% at 49,168.16 after retreating from record highs on Wednesday. Meanwhile, the S&P 500 was up just 0.06%, while the Nasdaq fell 0.50%.

The Dow and S&P 500 both reached new heights on Tuesday as investors digested Trump's controversial raid on Venezuela at the weekend, in which the US military detained the country's president and took control of its energy industry. According to Trump, who pledged to deliver 30m to 50m barrels of Venezuelan oil to the US, America's involvement in Venezuela could last for years.

The US president has repeatedly raised the prospect of producing enough crude from Venezuela's oilfields to drive down the US oil price from more than $56 a barrel today to about $50 in an effort to cut energy costs for domestic consumers, the Wall Street Journal reported, citing senior administration officials.

Despite downward pressure on the oil price from oversupply concerns, heightened geopolitical tensions continued to produce some wild swings across commodity markets on Thursday, with WTI crude up 1.8% to $56.97 a barrel.

In economic data, initial jobless claims rose 8,000 to 208,000 last week, largely as expected, though the four-week moving average fell 7,250 to 211,750, hitting its lowest mark since late-April 2024.

Meanwhile, the US trade deficit fell to $29.4bn in October, down from a revised $48.1bn in September, marking the smaller deficit since June 2009.

Defence stocks jump

Defence companies Lockheed Martin, Northrop Grumman and RTX all rose strongly after Trump's comments about defence spending.

Stocks across the sector were rebounding after tanking on Wednesday after the president attacked weapons makers and Pentagon contractors for excessive exec pay and share buybacks, pushing them to invest more in production and infrastructure.

Meta Platforms was lower after the news that Chinese regulators are to probe its $2bn acquisition of artificial intelligence start-up Manus. China's Ministry of Commerce said regulators would assess if the deal was consistent with the country's regulations of export controls, technology imports and exports, and external investments.