Markets Weigh Trump’s Proposed Arctic Deal: Energy, Defense and Industrials in Focus

President Trump has posted a new announcement on Truth Social, the social media platform. He wrote:

“Based upon a very productive meeting that I have had with the Secretary General of NATO, Mark Rutte, we have formed the framework of a future deal with respect to Greenland and, in fact, the entire Arctic Region. This solution, if consummated, will be a great one for the United States of America, and all NATO Nations. Based upon this understanding, I will not be imposing the Tariffs that were scheduled to go into effect on February 1st. Additional discussions are being held concerning The Golden Dome as it pertains to Greenland. Further information will be made available as discussions progress. Vice President JD Vance, Secretary of State Marco Rubio, Special Envoy Steve Witkoff, and various others, as needed, will be responsible for the negotiations — They will report directly to me. Thank you for your attention to this matter!

DONALD J. TRUMP
PRESIDENT OF THE UNITED STATES OF AMERICA”

How Will Trump’s Statement Affect the Stock Market?

This latest post has the potential to affect the stock market. That’s because Trump’s announcement of a potential Arctic/Greenland deal and the suspension of February 1 tariffs could boost risk appetite, supporting energy names with Arctic exposure optionality (CVX, COP, XOM, XLE, VDE, OIH) and broad industrial/aerospace complexes (LMT, NOC, RTX, PPA, XAR, ITA, VIS, XLI, IYJ) on expectations of increased defense, logistics, and infrastructure spending in the region. Defense contractors and aerospace ETFs in particular may see a speculative bid on prospects of expanded NATO-related defense commitments and Arctic security investments, while logistics and shipping firms (FDX, UPS, ZIM) could benefit from anticipated growth in Arctic trade routes, tempered by execution and geopolitical risk. Overall, the signal of reduced tariff uncertainty is modestly bullish for cyclicals and industrials (VIS, XLI, IYJ) and energy, though market reaction will hinge on whether concrete agreements and spending plans follow the rhetoric.

Here are some of the stocks that might be affected:
Chevron ((CVX)),
Conocophillips ((COP)),
Exxon Mobil Corp. ((XOM)),
FedEx Corporation ((FDX)),
Lockheed Martin ((LMT)),
Northrop Grumman Corp. ((NOC)),
United Parcel Service ((UPS)),
Rtx Corporation ((RTX)),
Vanguard Industrials ETF ((VIS)),
Industrial Select Sector SPDR Fund ((XLI)),
Energy Select Sector SPDR Fund ((XLE)),
VanEck Oil Services ETF ((OIH)),
Vanguard Energy ETF ((VDE)),
Invesco Aerospace & Defense ETF ((PPA)),
SPDR S&P Aerospace & Defense ETF ((XAR)),
iShares U.S. Aerospace & Defense ETF ((ITA)),
iShares U.S. Industrials ETF ((IYJ)),
Zim Integrated Shipping Services Ltd. ((ZIM)).