Iran’s parliamentary speaker, Mohammad Bagher Ghalibaf, accused the U.S. of breaking the newly announced two-week ceasefire. Notably, he pointed to a long history of distrust by arguing that the U.S. has repeatedly failed to honor its commitments and that the same pattern is happening again. As a result, defense ETFs are back in focus, as investors may look for exposure through:
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- Invesco Aerospace & Defense ETF (PPA)
- iShares U.S. Aerospace & Defense ETF (ITA)
- SPDR S&P Aerospace & Defense ETF (XAR)
Ghalibaf also claimed that several parts of Iran’s ceasefire proposal have already been violated. He specifically mentioned continued Israeli attacks in Lebanon, as well as disagreements over Iran’s right to enrich uranium. Because of these issues, he said that further negotiations or a bilateral ceasefire no longer make sense. So far, the White House has not responded publicly to these claims, which adds more uncertainty around whether the agreement will hold.
There is also a growing disagreement between the U.S. and Iran over what the ceasefire actually includes, especially when it comes to the Strait of Hormuz. President Donald Trump has pushed for the Strait to reopen fully and without restrictions. However, Iran is reportedly considering charging tolls for ships to pass through.
Which Defense ETF Is the Better Buy?
Turning to Wall Street, out of the three ETFs mentioned above, analysts think that XAR has the most room to run. In fact, XAR’s price target of $336.03 per share implies 24% upside potential.
