Trump’s Iran Tariff Threat: Trade Shockwaves for Industrials, Energy, Financials and Defense Stocks

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

“Effective immediately, any Country doing business with the Islamic Republic of Iran will pay a Tariff of 25% on any and all business being done with the United States of America. This Order is final and conclusive. Thank you for your attention to this matter!
PRESIDENT DONALD J. TRUMP”

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 threat of a 25% tariff on any country doing business with Iran would likely rattle global trade and energy markets, pressuring multinational industrials like Boeing, Caterpillar, and broad industrial ETFs (VIS, XLI) due to heightened geopolitical risk and potential retaliation. Energy majors such as Chevron and Exxon Mobil, and energy-focused ETFs (XLE, VDE) could see elevated volatility as investors weigh higher geopolitical risk premia in oil against possible disruptions to specific regional flows. Big U.S. banks (C, JPM) and financial ETFs (XLF, VFH), along with defense contractors and their ETFs (LMT, RTX, PPA, ITA), might initially benefit from flight-to-safety trades, wider trading spreads, and increased defense spending expectations, though overall risk-off sentiment could cap gains across cyclicals.

Here are some of the stocks that might be affected:
Boeing Company ((BA)),
Caterpillar ((CAT)),
Chevron ((CVX)),
Citigroup Inc ((C)),
Exxon Mobil Corp. ((XOM)),
JPMorgan Chase & Co. ((JPM)),
Lockheed Martin ((LMT)),
Rtx Corporation ((RTX)),
Vanguard Industrials ETF ((VIS)),
Financial Select Sector SPDR Fund ((XLF)),
Industrial Select Sector SPDR Fund ((XLI)),
Energy Select Sector SPDR Fund ((XLE)),
Vanguard Energy ETF ((VDE)),
Vanguard Financials ETF ((VFH)),
Invesco Aerospace & Defense ETF ((PPA)),
iShares U.S. Aerospace & Defense ETF ((ITA)).