Iran War and Global Tensions Fuel Boom in US Defense Industry Orders

Escalating conflict involving Iran and wider geopolitical instability is driving a surge in demand for US-made weapons, with major defense contractors reporting strong earnings and record order flows.

Companies including RTX Corporation, Northrop Grumman and GE Aerospace say 2026 is shaping up to be another strong year following increased global military spending tied to conflicts in Gaza, Ukraine, and rising tensions in Asia and the Middle East.

RTX CEO Chris Calio said the company is working with US defense authorities to speed up production of critical weapons systems.

While noting hopes for a “sustained resolution” in the Middle East, he said RTX is collaborating with the Pentagon “to accelerate munitions production.”

US authorities have already moved to expand output of key systems including Tomahawk, Patriot and GEM-T missiles as global demand rises.

RTX has secured five major Pentagon contracts through its Raytheon unit, which Calio described as “vitally important for national security,” alongside nearly $900 million in capacity expansion investments.

“The current landscape clearly underscores the need for munitions… and more advanced capabilities to counter evolving threats,” he said, adding: “We’re seeing really, really strong demand, both domestically and internationally.”

GE Aerospace reported a 25 percent revenue jump, with CEO Larry Culp describing conditions as part of a “dynamic geopolitical landscape.”

He said the Middle East war is expected to remain a factor through the summer, even as the company supports allied military operations.

At the same time, reduced travel in the region has slightly impacted its aviation maintenance business.

Northrop Grumman CEO Kathy Warden said the company has rapidly expanded its manufacturing footprint, adding 20 facilities in two years.

“Clearly the conflict with Iran has created a heightened sense of urgency,” she said.

Meanwhile, US defense officials said President Donald Trump’s proposed fiscal 2027 budget of $1.5 trillion represents a “generational investment in the United States military, the arsenal of freedom.”

The plan includes a 42 percent increase aimed at boosting weapons production, strengthening supply chains, and supporting thousands of small and medium-sized businesses.

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