Shares of RTX Corp (RTX -2.73%) are trading lower on Friday. The company's stock lost 2.8% as of market close but lost as much as 3.5% earlier in the day. The drop comes as the S&P 500 lost 0.1%, and the Nasdaq composite gained 0.4%.
RTX, the defense giant formerly known as Raytheon, saw its stock impacted by comments made by President Trump on Thursday.
President Trump, speaking from the White House on Thursday, told reporters that he would move to slash defense spending. The President said that he intended to meet with Russia and China in the future to reach an agreement to cut defense spending in half.
"When we straighten it all out, then one of the first meetings I want to have is with President Xi of China and President Putin of Russia, and I want to say let's cut our military budget in half. And we can do that, and I think we'll be able to do that," Trump said.
This comes as Department of Government Efficiency Chief, Elon Musk, turns his sights on the Pentagon. The defense department is currently preparing a report for Musk and his team, pre-emptively looking for ways to cut spending.
Roughly half of RTX's revenue comes from U.S. government defense spending. Any cuts would have an outsized impact on RTX, let alone 50% cuts. Although it's unclear that any significant cuts will actually happen, the possibility was enough to spook investors.
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