Al Root

The situation in Ukraine took an unexpected turn after a heated Oval Office exchange between Vice President J.D. Vance and Ukraine President Volodymyr Zelensky that ended with President Donald Trump scolding the foreign leader.

"Either make a deal or we're out," Trump told Zelensky.

Investors were expecting a less contentious meeting with a potential deal for mining rights in exchange for additional U.S. support.

Defense stocks wobbled after the meeting. Shares of AeroVironment, a contractor supplying munitions to Ukraine, dropped about $2 from levels before the meeting, leaving shares down about 1.5% on the day.

Lockheed Margin dropped about $2 from levels before the meeting, though that stock is off daily lows and flat on the day. Shares of Northrop Grumman, General Dynamics, and L3Harris Technologies were down 0.7%, 0.3%, and 0.4% in late trading, while the S&P 500 and Dow Jones Industrial Average were both down about 0.1%.

The meeting might have impacted the market. President Trump told Zelensky he was putting the world at risk of a significant global conflict.

Defense stocks have struggled since the Nov. 5 election. Investors aren't sure about the direction of defense spending or Trump's priorities, which could siphon money away from large, expensive programs like the F-35 fighter jet into unmanned technology.

Through midday trading, Lockheed, L3Harris, Northrop, and General Dynamics shares are down about 16% since Nov. 5. The S&P 500 is up about 1% over that span. Shares of AeroVironment are off more than 30%.

"I have determined President Zelenskyy is not ready for peace if America is involved, because he feels our involvement gives him a big advantage in negotiations," wrote President Trump on Truth Social Friday afternoon. "I don't want an advantage, I want PEACE."

He added that Zelensky disrespected the U.S. and said he can come back when he is ready for peace.

Write to Al Root at allen.root@dowjones.com

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(END) Dow Jones Newswires

February 28, 2025 13:34 ET (18:34 GMT)

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