Defence stocks slid amid escalating tensions between the US and Iran, with weapons manufacturers losing ground despite the geopolitical conflict. Investors reacted cautiously, selling off defence shares as concerns mounted about production bottlenecks and uncertainty surrounding future US defence funding allocations.

Oil prices surged to nearly $120 per barrel as Trump indicated an extended stand-off in the Strait of Hormuz, further complicating the market dynamics. Meanwhile, the UK-US relationship demonstrated resilience under pressure, with King Charles defending the transatlantic alliance during a speech to Congress.

The market behavior reflected a pattern where investors "buy the rumour but sell the war," according to analysts tracking defence sector performance. Despite the geopolitical tensions, production bottlenecks and funding concerns have outweighed potential defence spending increases, leaving defence stocks underperforming despite the heightened conflict in the region.