Trump Targets Defense Dividends: A Battle With Wall Street

President Trump aims to block defense contractors from issuing dividends or buying shares until they enhance weapons production speed. This move has unsettled Wall Street, causing defense stocks to drop. Trump also criticizes executive pay in the defense sector, advocating for new production plants.

In an unprecedented move, U.S. President Donald Trump announced plans to halt defense contractors from paying dividends or repurchasing shares until they expedite weapons production, a decision that sent shockwaves through Wall Street norms as defense stocks plummeted.

The president, alongside the Pentagon, has voiced concerns over the defense industry's high costs and sluggish production speed, demanding substantial reforms to ensure faster production and efficient maintenance of military equipment. Trump took to Truth Social to express his dissatisfaction, highlighting the urgency for nimble production.

Trump did not disclose his enforcement strategy for dividend and buyback restrictions. The defense sector saw stock devaluation after his remarks amid recent gains due to the capture of Venezuelan President Nicolás Maduro. Executive pay in this industry also drew Trump's ire, with calls to cap salaries at $5 million, urging investments in modern production facilities.

(With inputs from agencies.)