Israel-Iran Conflict Lifts Defense Stocks While Airline Shares Drop On Crude Oil Price Concerns

U.S. defense stocks climbed Friday morning while shares of airlines and cruise operators fell sharply following Israel's military strike on Iran, which sparked tensions across the Middle East and led to a surge in oil prices.

Shares of Lockheed Martin (LMT) gained more than 3%, RTX Corp. (RTX) rose around 2%, and Northrop Grumman (NOC) added 2.5%. Meanwhile, L3Harris Technologies (LHX) advanced 1.6% after the opening bell.

Lockheed's stock has underperformed this year compared to its peers, gaining only 0.1% in 2025. In contrast, RTX and L3Harris's stock have gained more than 20% each, while Northrop Grumman's stock is up 8% this year.

The gains in defense contractors came after Israel struck over 100 targets in Iran overnight. The Israeli military said it had targeted nuclear and command infrastructure. 

Israel reportedly has plans to continue its attack on Iran for another 14 days. Meanwhile, U.S. President Donald Trump urged Iran's officials to strike a nuclear deal before“there's nothing left.”

Travel stocks were broadly lower on renewed worries around rising oil prices as Brent crude gained 8.3% on Friday. An increase in oil prices has sparked concerns about higher jet fuel costs for airlines, which will face additional expenses from circumventing new airspace closures.

American Airlines (AAL) shares declined nearly 5%, while Delta Air Lines (DAL) and United Airlines (UAL) dropped around 4%. 

Cruise stocks also weakened, with Carnival (CCL) down 4.7%, Norwegian Cruise Line Holdings (NCLH) tumbled 3.2%, and Royal Caribbean Group (RCL) slipping 2.7%.

Boeing (BA) and GE Aerospace (GE) continued their pullback following Thursday's deadly Air India plane crash in Ahmedabad, India. Boeing's stock, which fell 4.75% on Thursday, was down another 2% on Friday. GE Aerospace's stock dropped 2% in morning trade, extending Thursday's losses.

Even before the latest escalation, airlines have been trimming their forecasts for the year on concerns about an economic slowdown in the U.S. amid U.S. President Donald Trump's tariff negotiations. 

American Airlines' stock has fallen 40% this year, while Delta Air Lines' stock is down 22% and United Airlines' stock has declined 23%.

Within cruise stocks, Norwegian Cruise Line Holding's stock is among the worst hit, down over 30% in 2025. Carnival's stock has slipped 10% this year. However, Royal Caribbean Group's stock has managed to stay in the green with gains of around 11% over the same period.

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Read also: Trump Says Iran Must Make A Deal 'Before There's Nothing Left'

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