Missiles & Precision-Guided Munitions

The FY2026 defense appropriations agreement includes more than $6.3 billion for 13 critical munitions and grants conditional multiyear procurement authority for eight of those programs, a tailwind for RTX Corp. as it scales production of AMRAAM air-to-air missiles, Standard Missiles and Tomahawk cruise missiles. RTX's order backlog reached a record $289 billion by the end of second quarter fiscal 2026. The company will spend $25 million to expand its Niepołomice site in Poland, which delivers tubular assemblies for commercial and military engines, following a $100 million capital outlay announced in April for its Rzeszów facility. RTX closed at $185.01 on October 1 with a market capitalization of about $249.3 billion, trading at a trailing P/E of 33.62x and a forward P/E of 24.57. Hedge fund ownership slipped from 95 funds in Q1 2026 to 92 funds in the following quarter, while BlackRock remains the largest institutional stakeholder with 110.53 million shares, or 8.20% ownership.

L3Harris Technologies has secured an undefinitized contract from Lockheed Martin worth more than US$6b over seven years to expand propulsion output for the THAAD missile defense system. The arrangement follows a prior framework with the Department of War to quadruple THAAD propulsion production and includes both a new Solid Rocket Boost Motor facility and added Liquid Divert and Attitude Control capacity. The contract lands as L3Harris shares have fallen about 9% over the past month and 22% year to date on a share price basis, though the 3 year total shareholder return is up roughly 53%. The company closed at $236.60, while the most followed narrative estimates fair value at about $342 per share using an 8.4% discount rate, framing the win as one more contract feeding into a broader backlog and earnings story. The story could break if U.S. budget pressure trims space spending or if prime contractor delays slow conversion of the reported US$42b backlog.

The US Navy has placed a multi-year contract with Raytheon, a unit of US defense giant RTX, to produce the Standard Missile 6 (SM-6) interceptor. The contract is worth up to $24.4 billion. It covers five years with an option to extend for another two, aiming to ensure a stable and reliable supply of the SM-6, which can carry out both strike and missile defense missions. The deal is part of a series of large weapons contracts pursued this year as the US Department of Defense seeks to replenish ammunition stockpiles depleted by conflicts in the Middle East and push defense companies to accelerate production. In late September, it signed a $20.7 billion multi-year preliminary contract for Raytheon's AMRAAM air-to-air missile, and in July it awarded Lockheed Martin a $58.6 billion Patriot interceptor missile contract. Industry executives have warned that Congress has not yet approved the funding needed for these contracts, and that defense companies may be unable to make large-scale investments in components and equipment until Congress acts.

Kratos Defense & Security Solutions is expanding its solid rocket motor capabilities through Prometheus Energetics, a joint venture with RAFAEL that will build a state-of-the-art energetics manufacturing campus on an approximately 500-acre site near the U.S. Navy and Army facility in Crane, Indiana. Kratos Defense and RAFAEL have committed up to $175 million in capital for the venture, covering the manufacturing facilities, property, equipment and personnel needed for the planned operations. Following construction and completion of RAFAEL's technology transfer and certification, Prometheus is expected to begin solid rocket motor production in 2027, with Kratos' investment in the venture ramping up during 2026 to support development of the planned manufacturing infrastructure. The new capacity could strengthen Kratos' position in propulsion and rocket systems, adding another manufacturing base alongside its existing Zeus solid rocket motors. Rivals Northrop Grumman and Lockheed Martin are also expanding solid rocket motor manufacturing capacity across their U.S. facilities to support defense and space propulsion programs and strengthen the domestic propulsion supply chain.

GE Aerospace and Kratos Defense successfully ignited the GEK800 turbofan cruise missile engine, a fresh data point for investors watching General Electric's defense story. The news lands against a mixed stretch for the share price: a 30 day share price return of 7.21% and a 90 day share price return of 15.22%, alongside a 1 year total shareholder return of 6.08% and a very large 5 year total shareholder return. General Electric now trades only slightly below some intrinsic value estimates while sitting well under the average analyst target, and on the narrative view its fair value sits at $307 against a last close of $317.89, a 3.5% overvalued reading. On the P/E lens the shares trade on 36.8x earnings, above both the 35.6x industry average and the same 35.6x peer group level, and above a fair ratio estimate of 34.7x. The company's reliance on Boeing's production tempo and exposure to tight aerospace supply chains remain the key risks to the wide moat narrative.

RTX unit Raytheon has secured a multi-year AMRAAM missile production contract worth up to US$20.7b. The agreement supports the Department of War's Arsenal of Freedom initiative to accelerate delivery of advanced air-to-air missiles, and the multi-year award is intended to expand AMRAAM manufacturing capacity to meet large-scale government demand for missile systems. RTX operates as a large US$252.9b aerospace and defense contractor that supplies systems and services to military, commercial, and government customers, so the long-term AMRAAM production agreement fits directly into its core role as a key weapons supplier for US defense programs. The award plugs into an RTX narrative that hinges on converting a US$289b backlog, especially long-duration munitions deals, into tangible revenue and operating profit, and the Arsenal of Freedom scope lines up with earlier commentary on several contracts where missile volumes are expected to rise between 2x and 4x. The key proof point is whether RTX gets AMRAAM output up to the levels implied by this deal while preserving margins, with reported book-to-bill in Raytheon, missile shipment volumes tied to the Arsenal of Freedom initiative, and management's updates on missile capacity within the planned US$10b to US$10.5b 2026 capital program as the metrics to watch.

Lockheed Martin Missiles and Fire Control has been awarded a $244.96M firm-fixed-price modification to a previously awarded U.S. Navy contract, adding scope to procure Full Rate Production 2 of F/A-18E/F Infrared Search and Track Block II systems. That modification covers 48 infrared receivers, 45 for the Navy and three for the Royal Australian Air Force, along with 74 processors and 27 inertial measurement units for the Navy, plus test equipment maintenance and lay-in material, with work performed across Florida, California and Pennsylvania and expected completion in February 2031. The Navy also awarded Lockheed a $52.11M cost-plus-fixed-fee modification to a previously awarded contract to incorporate engineering changes into F-35 Lot 18-19 air vehicle production for the Air Force, Marine Corps, Navy, F-35 Cooperative Partners and Foreign Military Sales customers. Separately, Lockheed Martin Rotary and Mission Systems of Moorestown, New Jersey, was awarded a $724M contract modification for the Japanese Ministry of Defense, raising the total contract value from $1.64B to $2.36B. That contract covers delivery of the Aegis System-equipped vessel #1 and ASEV #2 AEGIS Combat System to Japan, with work performed in Moorestown, New Jersey, and Japan from Sept. 29, 2026, through March 31, 2030.

Insiders say Iran sees little possibility of reaching an agreement to end the war with the United States and reopening the Strait of Hormuz before the midterm elections in November, while talks between the two sides on the sidelines of last week's UN General Assembly made only slight progress. Iran believes there is a high likelihood the conflict will escalate after the US midterm elections on November 3. President Donald Trump told reporters on Monday, September 28, that US representatives are discussing negotiations with Iran through intermediaries but declined to give details, stressing that the matter will end one way or another and will conclude fairly quickly. A US official said Washington will not reach a deal with Iran without resolving the issue of Iran's nuclear program, and that Trump is ready to ease sanctions and unfreeze Iran's frozen assets if Iran shows concrete progress on the nuclear issue. Meanwhile, Iranian Foreign Minister Abbas Araghchi, who met last week with Trump representatives Jared Kushner and Steve Witkoff, remains in the United States for further discussions through intermediaries. Qatari mediators are expected to arrange separate talks with Abbas Araghchi in New York and to hold discussions with the US side on Monday or Tuesday local time. The main issue is refining the proposal for a 7-day opening of Hormuz that Iran put forward last week. Mediators are pushing for an agreement different from the memorandum of understanding signed by Iran and the United States in mid-June, which led to a ceasefire and helped increase shipping through the Strait of Hormuz but collapsed within just two weeks and was criticized by US politicians as giving Iran too much financial benefit, especially through sanctions relief. Iran continues to restrict shipping in the Strait of Hormuz, leaving cargo and oil transport volumes far below pre-war levels. Two sources said the US government has told intermediaries that it wants Iran to give clear commitments on reopening the Strait of Hormuz and to make concessions on the nuclear program. Iranian President Masoud Pezeshkian reiterated to the UN General Assembly that Iran does not seek to develop nuclear weapons but will not give up its right to develop nuclear technology for economic benefit.

Kratos Defense & Security Solutions and GE Aerospace announced the successful first ignition of the GEK800 Serial Number 1 turbofan engine on September 21, a milestone in a program the U.S. military has designated the F143-ZZ-100. The test, conducted at Kratos' X-58 facility, achieved a 100% success rate for the development phase and keeps the affordable, high-performance propulsion system on schedule for advanced cruise missiles and uncrewed aerial systems. For Kratos, the milestone supports a Government Solutions segment that posted $379.7 million in Q2 2026 revenue, up 22.0% organically, with Turbine Technologies up 43.3% organically, a consolidated book-to-bill ratio of 1.1x and $2.084 billion in backlog, as the company ramps full-year 2026 revenue guidance to $1.750–$1.810 billion. GE Aerospace's Defense & Propulsion Technologies segment reported $3.4 billion in Q2 2026 revenue, up 16%, and raised full-year DPT operating profit expectations to $1.6–$1.7 billion. Kratos also faces cash conversion pressure, with $11.0 million in Q2 2026 operating cash outflow and $18.9 million in negative free cash flow, while GE's DPT margins face ongoing pressure from investments and inflation.

The dollar index held steady near a two-month high, supported by a stalemate in peace talks between the United States and Iran, which pushed oil prices sharply higher and increased the likelihood that the Federal Reserve will raise interest rates. As of 11:05 p.m. Thailand time, the dollar index was up 0.24% at 101.210 and was on track for a 1.7% gain this month, which would be its largest monthly increase since June. Meanwhile, investors increased their bets that the Fed will raise rates twice more this year, with the CME Group's FedWatch Tool indicating that investors now assign a 68.1% probability to a 0.25% Fed rate hike to a range of 4.00-4.25% at the October meeting, up from 57.6% a week earlier, and a 55.1% probability of another 0.25% increase to 4.25-4.50% in December, up from 44.1%. In global oil markets, crude prices surged more than 3%, with West Texas Intermediate crude breaking above 95 dollars per barrel and Brent crude topping 108 dollars per barrel, after President Donald Trump rejected Iran's conditional peace proposal to open the Strait of Hormuz and told aides he expected the United States to strike Iran again after the November midterm elections. Investors are also watching several economic data releases this week, including the August personal consumption expenditures price index due on Wednesday, manufacturing figures on Thursday, and the September nonfarm payrolls report on Friday.

Global crude oil prices soared more than 3% after US President Donald Trump rejected Iran's peace proposal, which aimed to end the conflict in the Middle East and open the Strait of Hormuz. As of 7:09 p.m. Thailand time, West Texas Intermediate crude for November delivery rose 3.52 dollars, or 3.80%, to 95.93 dollars per barrel, while Brent crude for November delivery rose 3.83 dollars, or 3.67%, to 108.15 dollars per barrel. Iranian Foreign Minister Abbas Araghchi said Iran will reopen the Strait of Hormuz and resume nuclear negotiations with the United States within seven days if the Trump administration agrees to Iran's conditions. Iranian Foreign Ministry spokesman Esmaeil Baghaei said the conditions include ending what Iran calls US acts of aggression, lifting the naval blockade and economic warfare against Iran, and unfreezing Iranian assets. Meanwhile, President Trump told his aides that he expects the United States to strike Iran again after the November midterm elections, and that the conflict with Iran is expected to end soon after the midterms, after which oil prices will decline.

The conflict between the United States and Israel and Iran that erupted on February 28 shut down both the Strait of Hormuz and the Bab el-Mandeb Strait, key passages for the world's oil and goods, at the same time. Brent crude closed at $103.87 a barrel on September 18, up about 70% since the start of the year, and touched a four-year high of $126, after trading at around $68 to $70 a barrel before the war. Traffic through the Strait of Hormuz, which once carried about 20 million barrels of oil a day, fell by roughly 95%, and war risk insurance premiums surged from about 0.25% to between 3% and 10% of a vessel's value, pushing VLCC charter rates from the Middle East to China to $423,736 a day in early March, the highest level since record-keeping began in November 2005. Saudi Arabia's crude oil exports fell from more than 7.5 million barrels a day at the start of the year to about 2.1 million barrels in the first half of September, a drop of more than 70%, after the East-West pipeline was suspended on September 11 and Aramco halted loadings at the Yanbu port. On the domestic impact, Thailand imports about 57% of its oil from the Middle East, diesel prices jumped from 29.94 baht a liter to 50.54 baht a liter on April 7, and the OECD expects Thailand's GDP growth to fall from 2.4% in 2025 to 1.7% in 2026. The Fed raised interest rates by 0.25% to 3.75% to 4% on September 16, its first hike since 2023, while the WTO expects global goods trade to grow 1.9% in 2026, down from 4.6% in 2025, and the IMF expects the world economy to grow 3.0% in 2026 and 3.4% in 2027.

President Lai Ching-te, Taiwan's leader, said Taiwan needs to tighten cooperation with democratic countries in developing drone technology, which is crucial to waging modern warfare, amid rising military pressure from China. Speaking today at the groundbreaking ceremony for a new drone development center in Chiayi in southern Taiwan, he said that from the battlefields of Ukraine to security in the Indo-Pacific region, drones have become a key fighting force in modern national defense. He called on Taiwan to work with democratic countries to develop a secure and resilient drone supply chain in order to support peace and stability in the Indo-Pacific. His remarks came as the Taiwanese government pushes ahead with military upgrades and higher defense budgets as one of its main policies, after China stepped up military pressure on Taiwan earlier this month. Taiwan's Cabinet proposed adding 145.7 billion Taiwan dollars, about 4.59 billion US dollars, to this year's defense budget. The budget covers the procurement of drones and missile interception systems, including more than 600 surveillance and coastal patrol drones, more than 40,000 coastal attack drones, and more than 100 explosive-laden unmanned boats. Lai said Taiwan has strengths in semiconductors, information and communications technology, and high-precision manufacturing bases that can be leveraged to develop a drone industry.

Iranian Foreign Minister Abbas Araghchi said on Sunday that Iran is ready for a doomsday war with the United States but is still keeping diplomatic channels open so as not to miss a chance to build peace. Speaking in an interview on NBC News' Meet the Press after last week's United Nations General Assembly, Araghchi said there is no reason for Iran to return to diplomacy, but he is still trying to negotiate because the opportunity to build peace should not be missed, and he affirmed that Iran is as ready to negotiate as it is to face any challenge, even one leading to a doomsday war. On Friday, Araghchi proposed reopening the Strait of Hormuz and resuming nuclear talks with the United States within seven days if the government of President Donald Trump accepts Iran's conditions, but Trump rejected the proposal, and according to The Wall Street Journal, Trump also said he expects to go back to bombing Tehran again after the US midterm elections in November. Meanwhile, US Ambassador to the United Nations Michael Waltz said in another NBC News interview that Iran's proposal was a self-serving attempt to put something on the table that it knows is unacceptable. On Sunday, Iran's Islamic Revolutionary Guard Corps claimed it had seized a US Remus 600 unmanned underwater vehicle in the Strait of Hormuz and declared the strait closed to unauthorized traffic, while Major General Amir Hatami, Iran's top military commander, stressed that the war is not over. The war, which began on February 28, has severely restricted energy shipments from the Middle East, sending oil prices sharply higher and adding to global inflation concerns. West Texas Intermediate crude fell 2.3% to close at 92.41 dollars a barrel, and Brent crude dropped 2.1% to close at 104.32 dollars. For the week, US crude fell 7.9%, while Brent was roughly flat. Year to date, WTI is up nearly 61% and Brent is up more than 71%.

Lockheed Martin has secured a U.S. Army contract worth up to $1.2 billion to produce the Increment 2 variant of its Precision Strike Missile, a next-generation long-range weapon designed to replace the Army Tactical Missile System. The award follows a second successful flight test in August that demonstrated the Increment 2 missile's ability to engage moving maritime targets. The contract is an indefinite-delivery, indefinite-quantity vehicle covering initial procurement, future orders, follow-on production and continued development, so the $1.2 billion ceiling is not guaranteed revenue. It builds on a seven-year agreement signed in March to raise annual PrSM production capacity to 550 missiles, following a $4.94 billion Army contract awarded in 2025. Lockheed's Missiles and Fire Control segment posted $4.1 billion of sales in the second quarter of 2026, up 19% year over year, with operating profit up 24% to $594 million, and its backlog reached $87.9 billion as of June 28, 2026, helping push the company's total backlog to a record $230.4 billion. Lockheed is simultaneously ramping PrSM, PAC-3 and THAAD production, putting pressure on manufacturing capacity and the supply chain.

GE Aerospace, a unit of General Electric, and Kratos completed a successful ignition test of the new GEK800 cruise missile engine. The milestone advances propulsion systems designed for long range cruise missiles in support of Department of War programs, and highlights fresh engineering and manufacturing capabilities within GE Aerospace focused on high performance, cost focused defense propulsion. The GEK800 ignition ties directly into General Electric's Defense & Propulsion Technologies backlog above US$30b and supports the catalyst around acceleration of next generation engine programs such as adaptive cycle engines and CCA propulsion. For the milestone to matter to shareholders, the next stretch of the GEK800 program needs to hold schedule and convert into volume work, with formal program decisions from the Department of War, a shift from single engine trials to a broader qualification campaign, and signs that GE can fold any eventual production into its FLIGHT DECK supply chain model without adding margin pressure to the wider defense portfolio.

The Saudi-led coalition in Yemen revealed that it intercepted 2 guided missiles and 2 drones fired into Saudi Arabia by the Iran-backed Houthi group. The two missiles were headed toward the city of Khamis Mushait, while the two drones were headed toward Riyadh. Civil defense authorities issued warning alerts overnight for the Khamis Mushait and Abha areas, but no alert was issued for Riyadh. The attack came after the Houthis announced a maritime blockade against Saudi Arabia in July, targeting Saudi ships in the Red Sea, creating pressure on global oil supplies and risk to Red Sea shipping routes, while navigation through the Strait of Hormuz remains largely blocked. Amid the situation, military commanders of Saudi Arabia, Pakistan, and Turkey, which are defense allies, met in Riyadh just a few hours earlier to review the threats Saudi Arabia is facing, after the three countries signed the joint Mecca defense agreement in August, which states that an armed attack on any one country will be considered an attack on all. Saudi Defense Minister Prince Khalid bin Salman said he discussed with Asim Munir, Pakistan's army chief, in Riyadh and confirmed the continuation of joint cooperation to counter attacks under the agreement.

Lockheed Martin Corporation has received its first shipment of critical housing components for Patriot PAC-3 MSE interceptors from General Motors Company's defense unit, just 22 days after the two companies signed a manufacturing agreement on August 6, 2026. The components, delivered August 28, traditionally take months or years to produce, according to Reuters, as the Pentagon pushes for faster weapons production amid surging global demand for the Patriot missile defense system. The U.S. Army has announced a seven-year agreement worth up to $58.6 billion for PAC-3 MSE production from fiscal 2026 through 2032, supporting Lockheed's plan to raise annual output to 2,000 interceptors. Lockheed plans to invest $8 billion to $9 billion through 2030, modernize more than 20 facilities and add thousands of workers, though the companies have not disclosed the contract's value, expected component volumes, or GM's potential revenue. The initial shipment remains too small to affect either company's financial results by itself, and GM must demonstrate repeatable quality and volume before investors can assign value to the partnership.

Yemen's Houthi group said on the evening of Thursday, September 24, that it had fired missiles and sent drones to attack highly sensitive targets in Riyadh, the capital of Saudi Arabia, as well as facilities belonging to Aramco in Yanbu, a Red Sea port city. It marks a new round of long-range attacks amid an increasingly intense conflict with Saudi Arabia. Meanwhile, French President Emmanuel Macron said France is preparing to send military equipment to help protect Yanbu, a key industrial and energy hub on Saudi Arabia's Red Sea coast. In other conflicts, Iranian President Masoud Pezeshkian said ending the war that has dragged on for seven months depends on a decision by the United States, while China is pushing all parties to reduce tensions. At the 81st regular session of the United Nations General Assembly, Xinhua News Agency reported that representatives of several countries walked out of the chamber in protest while Israeli Prime Minister Benjamin Netanyahu delivered his remarks during the general debate. Chinese President Xi Jinping said at the White House on Thursday, September 24, that both China and the United States have the capacity and the responsibility to develop and manage artificial intelligence technology for the benefit of humanity, and must ensure that such technology always remains under human control. Meanwhile, U.S. airlines came out against the idea of adding passenger flights between the United States and China after President Xi Jinping proposed that the two countries increase direct flights. U.S. airlines argued that adding flights would further favor Chinese carriers, since they can still use flight routes through Russian airspace. In financial markets, the yield on 10-year Japanese government bonds jumped to 3.115% today, the highest level since August 1996. And Denmark's defense intelligence service warned that Russia may carry out limited military attacks on NATO member states in the coming months, assessing that the risk has increased although it remains at a low level.

Iranian President Masoud Pezeshkian said that ending the war, now in its seventh month, depends on a decision by the United States. Speaking in an interview with Fox News broadcast on Thursday, September 24, he said America must choose whether to end this, after being asked whether the war could end by the end of this year. Fighting continues, with Houthi forces launching a barrage of missiles and drones at targets in Saudi Arabia on the morning of September 25. Saudi authorities said they intercepted six missiles and issued alerts in Mecca, Jeddah and Yanbu. Saudi Arabia, Turkey and Pakistan are preparing an emergency meeting of military commanders to discuss ways to assist Saudi Arabia under the joint Mecca defense agreement, and Saudi Arabia's Grand Mufti called on forces to be ready to fight the Houthis until the group is removed from power. Pezeshkian said the Houthis must take responsibility for their own actions and that Iran is not in a state of war with Saudi Arabia. The Iran issue was also raised at the US-China summit in Washington, where Chinese President Xi Jinping, during a three-day visit to the United States, discussed a range of issues with President Donald Trump, including trade, artificial intelligence, Taiwan and Iran. Zhai Jun, China's special envoy for the Middle East, said the situation in the Middle East was one of the key issues discussed by the US and Chinese leaders, and said the shared views of both sides are important for defusing the conflict. Trump wants China to help pressure Iran to find a way to end the war, after the United States and Iran returned to indirect talks on the sidelines of the United Nations General Assembly in New York. Iranian officials have signaled that the Strait of Hormuz could reopen within seven days if the United States begins to ease its maritime blockade of Iranian ports.

French President Emmanuel Macron has revealed that France is preparing to send military equipment to help defend Yanbu, a key industrial and energy hub on Saudi Arabia's Red Sea coast. In an interview with French television station TF1 on Thursday, September 24, he said France had reached a final agreement in talks with Saudi Arabia on sending military equipment to protect the area, including troops, radar and air defense systems. Asked about the possibility of sending Rafale fighter jets, Macron said France would consider it based on changes in the situation and necessity, noting, "We already have some fighter jets stationed in this region." The French leader said the most important thing for him was "bringing energy prices down," and also mentioned the need to release oil from reserves and restore smooth transport routes in the Middle East. Xinhua News Agency reported that Macron's remarks came after Yemen's Houthi group said on Saturday, September 19, that it had launched a large-scale attack in Saudi Arabia, targeting the Saudi capital Riyadh and the city of Yanbu, marking a major escalation of the conflict between the two sides. Earlier on Thursday, the Saudi-led coalition said its air defense systems had intercepted six Houthi ballistic missiles aimed at the Saudi cities of Taif and Yanbu, while Saudi Arabia continued its air strikes against Houthi-held areas across Yemen.

Yemen's Houthi group said on the evening of Thursday, September 24, that it had fired missiles and sent drones to attack highly sensitive targets in Riyadh, the capital of Saudi Arabia, as well as a facility belonging to Aramco in Yanbu, a Red Sea port city. It marks a new round of long-range attacks amid an intensifying conflict with Saudi Arabia. A statement carried on Al-Masirah television, which is run by the Houthi group, said Yahya Saree, the group's military spokesman, announced that Houthi armed forces carried out two separate operations, one targeting an area in Riyadh and the other targeting the Aramco facility in Yanbu, using ballistic missiles, cruise missiles and a number of drones, and claimed that both operations achieved their objectives. Saree, however, did not specify the target in Riyadh and gave no details on damage or the number of dead and wounded. Saree added that this round of attacks was in response to Saudi forces continuing to carry out airstrikes and fire missiles at areas controlled by the Houthis in Yemen, and claimed that Saudi forces had carried out a total of 1,018 airstrikes and missile launches since the latest round of conflict began, causing civilian deaths and injuries as well as damage to infrastructure. The Houthi spokesman confirmed that the group will continue its retaliatory operations as long as Saudi military operations continue, reiterating the policy Saree described as escalating violence in response to escalation. Xinhua reported that the latest retaliatory attacks reflect the widening confrontation between Saudi Arabia and the Houthis, with both sides stepping up long-range attacks in recent weeks alongside increasingly intense ground fighting in Yemen.

It has emerged that negotiators for the United States and Iran are exploring a phased agreement aimed at Iran reopening the Strait of Hormuz and the United States lifting its naval blockade of Iranian ports. According to people familiar with the talks, the two countries are pursuing discussions aimed at breaking the deadlock on the 24th, on the sidelines of related meetings of the United Nations General Assembly being held in New York, with Qatari officials mediating the negotiations. The phased agreement is expected to take a form similar to a memorandum of understanding signed by the United States and Iran in mid-June, but the ceasefire that was established, albeit precariously, on the back of that memorandum collapsed just a few weeks later. Reuters was first to report on the talks over a phased agreement. A White House official said President Trump remains open to dialogue with Iran, while stressing that the United States has no need to negotiate, as intensified sanctions and the naval blockade are pressuring the Iranian economy and the United States holds the upper hand. Meanwhile, a spokesman for Yemen's Iran-aligned Houthi armed group said in a statement on Telegram that it had attacked Saudi Arabia twice using ballistic missiles, cruise missiles, and drones. The first attack targeted a key site in the Saudi capital Riyadh, and the second targeted a Saudi Aramco facility in Yanbu on the Red Sea coast, according to the spokesman.

The United States is critically short on air defense interceptors and long-range standoff missiles, the two weapons it would need most in a hypothetical conflict with China, according to a defense analyst speaking on Bloomberg Businessweek. The analyst said President Trump's reference to U.S. missiles and stockpiles in his UN General Assembly address broke with convention, and warned that Beijing would be watching gleefully because the shortfall means the U.S. would be less able to bring its potential military power to bear. The Pentagon's FY 2027 Program Acquisition Costs by Weapon System, dated April 21, 2026, funds a surge in interceptor and precision-munitions buys, and the primes named on those lines stand to gain most. RTX booked over $5 billion in GEM-T Patriot effectors, including its first domestic GEM-T production order in over 30 years, plus $1.8 billion in AMRAAM in the second quarter, and carries a $289 billion backlog. L3Harris controls the sole large-scale solid rocket motor supply for both THAAD and PAC-3, backed by a $12 billion seven-year framework agreement, while Lockheed Martin is the THAAD prime named in the budget document and won a seven-year, $35 billion Missile Defense Agency contract to quadruple THAAD interceptor production. Two catalysts could turn the thesis into results: a promised PAC-3 multi-year contract in the second half of 2026 and congressional action on the administration's $67 billion supplemental weapons-replenishment request and the $1.1 trillion Department of Defense base budget for fiscal 2027.

Lockheed Martin Corporation signed a framework agreement with the U.S. Department of War on September 17 to accelerate production of the AIM-260 Joint Advanced Tactical Missile, known as JATM. The framework is intended to set the stage for a future multiyear procurement contract, but it is not itself that contract and still requires Congressional approval before it can become one, and neither the company nor the Department of War disclosed a dollar value or specific production target. Lockheed Martin is funding capacity investments itself ahead of the proposed multiyear procurement contract, and Tim Cahill, president of Lockheed Martin Missiles and Fire Control, said the classified program is finally being discussed publicly. The agreement follows Australia's roughly A$736 million commitment to JATM as the program's first international customer, along with the company's recent IDIQ contract ceiling for the Army's PrSM Increment 2. Hedge fund ownership of Lockheed Martin fell from 83 at the end of Q1 2026 to 75 at the end of Q2 2026, while short interest remained modest at 1.39% of float as of August 31, 2026.

RTX announced on Tuesday that it won a $105.6M firm-fixed-price contract modification for Advanced Medium Range Air-to-Air Missiles parts purchases. The work will be performed in Tucson, Arizona, with completion expected by August 31, 2027. The award includes $61.6M in fiscal 2025 missile procurement funds, $8.4M in fiscal 2025 Navy weapons procurement funds, and $35.7M in FMS funds. The Air Force Life Cycle Management Center is the contracting activity.

RTX CEO Chris Calio highlighted the company's record $289 billion backlog, or remaining performance obligations, at the Morgan Stanley 14th Annual Laguna Conference last week, pointing to potential growth toward a Wall Street consensus of $460.5 billion by the end of 2028. Calio said the $289 billion RPO at the end of the second quarter does not include the recently awarded $22.9 billion seven-year Tomahawk cruise missile order or the five framework agreements RTX made with the Department of Defense in February, of which he said volumes will rise anywhere from 2 to 4x. The current RPO is split between $170 billion in commercial aerospace and $119 billion in defense, with only 25% set to be recognized in the next 12 months, and Calio noted that approximately 45% of the RPO relates to long-term commercial aerospace maintenance contracts at Pratt & Whitney expected to be realized over a span of up to 20 years. Calio also cited strength in orders across commercial aerospace original equipment, commercial aerospace aftermarket, and defense, noting that Boeing and Airbus have a 15,000 aircraft backlog to execute on and that demand for integrated air and missile defense is top of mind for every country around the world.

US President Donald Trump posted on Truth Social in response to media reports that the US weapons stockpile is running low after the war with Iran, insisting that the United States still has a large supply of weapons and that production is increasing at an unprecedented rate. Trump posted the message ahead of his speech to the United Nations General Assembly, or UNGA, tonight, saying, "The cowards and traitors like to say that the US weapons stockpile is running low, which is not true," and "We have more military equipment than we could ever imagine using, and we are now increasing weapons production at a level we have never seen before." Trump is scheduled to speak today at about 9:45 a.m. US time, or 8:45 p.m. Thailand time, following Brazilian President Luiz Inacio Lula da Silva. US Ambassador and Permanent Representative to the United Nations Mike Waltz said the speech will focus on how Trump and his administration directly confront complex global problems, and will address ensuring Iran does not obtain nuclear weapons, as well as report progress on the peace plan in the Gaza Strip. It is also expected that he will support the development of artificial intelligence, or AI, so that the United States remains the world leader in this area, as well as discuss the opening of the Strait of Hormuz, efforts to end the war between Russia and Ukraine, and reform of the United Nations.

US Treasury Secretary Scott Bessent revealed that all Iranian airlines will be blocked starting September 23, as the administration of Donald Trump presses ahead with increasing economic pressure on Iran. Bessent said in an interview on CNBC's "Squawk Box" that the US will pressure Iranian airlines by prohibiting countries and companies from providing services to these airlines, such as refueling, ground handling, or selling tickets, and warned that violators could be cut off from the dollar system. The US Treasury Secretary said the US is pressuring Iran in an unprecedented way, as the US is cutting off supporters and mechanisms that benefit Iran around the world, including sanctions on various banks. The measures come as US President Donald Trump is scheduled to deliver a speech to the United Nations General Assembly (UNGA) on Tuesday, amid growing domestic pressure over the decision to launch a war with Iran, which is sending shockwaves through the global economy.

PTT Public Company Limited reported on the oil market situation for the week of September 21-25, 2026, that average weekly oil prices rose across all categories. Brent crude stood at 105.79 US dollars per barrel, up 4.12 US dollars. West Texas crude stood at 102.37 US dollars per barrel, up 4.47 US dollars, and Dubai crude stood at 124.90 US dollars per barrel, up 8.45 US dollars. Meanwhile, 95-octane gasoline stood at 149.14 US dollars per barrel, up 11.22 US dollars, and diesel stood at 193.29 US dollars per barrel, up 18.61 US dollars. The main pressure came from the US-Iran war, which looks set to escalate after US embassies across the Middle East issued security alerts and warned citizens to avoid travel to Iran, Iraq, Lebanon, Yemen, Syria, and Saudi Arabia. At the same time, the conflict between Saudi Arabia and the Houthi group in Yemen continues to spread. On September 19, 2026, the Houthis used missiles and drones to attack Riyadh, including the area around King Khalid International Airport, causing fires. In addition, Saudi Aramco of Saudi Arabia sold 60 million barrels of crude oil for delivery in September to October 2026 from the Ras Tanura port, using ship-to-ship transfers in the Gulf of Oman to deliver to customers. Russia claimed it intercepted more than 1,600 Ukrainian drones during September 19-20, 2026, of which 450 were headed for Moscow, the largest attack on the capital since the Russia-Ukraine war began in 2022, leaving at least 3 people dead, at least 20 injured, and about 400 people evacuated from buildings. Meanwhile, the Moscow refinery of Gazprom Neft, with a capacity of 245,000 barrels per day in the Kapotnya district in southeastern Moscow, was attacked and caught fire, but there have been no reports of damage.

General Motors is supplying mission-critical components for Lockheed Martin's Patriot missile defense system under an agreement signed by the two companies on Aug. 6, 2026. Lockheed Martin confirmed on Sept. 17, 2026, that it had received its first shipment of components manufactured by GM Defense for the PAC-3 Missile Segment Enhancement interceptor missile, with that first shipment arriving on Aug. 28, 2026. GM Defense, General Motors' defense subsidiary that also builds vehicles for the U.S. Army, used its advanced casting and machining capabilities to make the parts, and the two companies are discussing additional collaboration as the United States seeks to expand its weapons stockpiles. General Motors spokesman Jim Cain said the company would not disclose the contract's value or production volumes because the information is proprietary, and General Motors also declined to identify the manufacturing location, citing operational and security concerns. Chief Executive Mary Barra said the defense business is a significant growth opportunity, with General Motors expecting the unit to generate approximately $700 million in revenues in 2026 while building a backlog of future programs that could deliver double-digit profit margins over the coming years. Separately, General Motors is positioned to secure a potential $1 billion contract to manufacture 10,000 Infantry Squad Vehicles for the U.S. military based on the Chevrolet Colorado platform.