Shares of two aerospace companies surged after the U.S. and Iran reported progress in peace talks. The market reacted immediately. Investors reassessed the outlook for an industry that depends on both the state of international trade and defense budgets.
A Win-Win Situation
The aerospace industry rarely sees a development that benefits both of its business segments at the same time. When the threat of a major war subsides, oil prices fall and air travel picks up, since fuel accounts for about 30% of airlines’ operating costs.
At the same time, planned defense spending isn’t going anywhere. NATO’s goals—such as the development of defense systems based on artificial intelligence—remain in place. Companies that manufacture both civilian engines and missile systems stand to benefit in two ways.
Who won, and how much?
Rocket Lab shares jumped 7%. Redwire rose 14.3%, even though the stock had already gained 94.5% since the start of the year.
This is not unusual for Redwire, as the company has seen 98 fluctuations of more than 5% over the past year. But even by that standard, the current surge has been significant, and the market has significantly shifted its perception of the company.
Before and after
Ten days ago, Redwire fell 6.2% following the release of U.S. inflation data for April. The Consumer Price Index reached 3.8%, and Brent crude rose to approximately $107 per barrel.
Manufacturing indices also signaled mounting pressure. The ISM Manufacturing Purchasing Managers’ Index reached 84.6%, a four-year high, and 47% of comments from manufacturers cited the war in Iran as a factor driving up costs. Higher oil prices are eroding profits, while more expensive borrowing is hampering production expansion.
An investor who put in $1,000 five years ago now has a portfolio worth about $1,747, even though the stock is still 14.6% below its annual high, which was reached in June 2025.
According to finance.yahoo.com
