Why ExxonMobil, Conoco Phillips, and Lockheed Martin Rallied on a Down Day for the Markets

Shares of oil and gas majors ExxonMobil (NYSE: XOM) and Conoco Phillips (NYSE: COP), as well as defense contractor Lockheed Martin (NYSE: LMT), rallied on Tuesday, up 2.8%, 4.2%, and 3.5%, respectively, as of 1:17 p.m. ET, even as the broader indices were down between 1% and 2% at that time.

Fortunately for their shareholders, but unfortunately for other sectors and the world, these critical companies saw their stocks rally as oil prices spiked on news that Iran was launching an imminent attack on Israel.

Shots fired in the Middle East

On Tuesday, a senior White House official said Iran is preparing to launch an imminent ballistic missile attack on Israel. Then at midday, the Israel Defense Forces reported Iran had in fact launched missiles toward Israel. The attack comes after Israel has struck against Iran’s proxy army Hezbollah operating in southern Lebanon. In addition, Israel is preparing a limited military operation in southern Lebanon to clear the area of Hezbollah militants.

Given that Iran and other Middle East neighbors are major oil and gas producers, the prospect of a wider regional conflict has the potential to disrupt oil supplies to the rest of the world. This is why both ExxonMobil and Conoco Phillips rallied along with oil prices, which were up nearly 4.5% to $71.25 as of this writing.

Higher oil prices would obviously benefit the top and bottom lines of Exxon and Conoco. Conoco is a pure explorer, but doesn’t have significant production in the Middle East region. And though Exxon is more diversified with midstream and downstream assets, it still makes the bulk of its earnings through oil and gas exploration, and therefore benefits when prices rise. Furthermore, Exxon derives most of its exploration from outside the Middle East.

And obviously, whenever geopolitical tensions ramp up, that usually bodes well for U.S. defense contractors’ stocks, with Lockheed Martin being the second-largest U.S. defense contractors by market cap.

Lockheed has actually had a tremendous year, with the stock surging over the summer on the back of better-than-expected earnings and more sales of its F-35 fighter jets to more allied countries.

In addition to general geopolitical news, Exxon and Lockheed also received two positive company-specific bits of news today. Exxon received approval from the Nigerian government to sell its Nigeria offshore assets to Seplat for $1.28 billion. Of note, Nigeria has been somewhat of a difficult geography for oil and gas operators recently, due to theft and corruption. Meanwhile, Lockheed Martin received a near-$3.9 billion naval contract for its Trident missile systems today, in addition to some smaller aeronautics contracts.

Neither news item is tremendously impactful to either company, given the overall size of these industry giants; however, these items were still likely incremental positives.

Oil and defense stocks: Hedges against geopolitics

While oil and gas stocks are out of fashion for many investors, given the focus on climate change and reducing emissions, they do offer a hedge against geopolitical events, such as the one we are seeing today. Remember, after Russia’s invasion of Ukraine in early 2022, traditional energy stocks went on to be some of the best performers that year.

So while oil and gas and defense stocks may not be as exciting as high-growth artificial intelligence (AI) plays these days, they do offer benefits in a healthily diversified portfolio. Moreover, most traditional energy and defense stocks also pay decent dividends.

So, today should be a reminder to investors of the role these types of stocks can play, offering hedges against geopolitical disasters, all while paying you growing dividends in the meantime.

Should you invest $1,000 in ExxonMobil right now?

Before you buy stock in ExxonMobil, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and ExxonMobil wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $744,197!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of September 30, 2024

Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy.

Why ExxonMobil, Conoco Phillips, and Lockheed Martin Rallied on a Down Day for the Markets was originally published by The Motley Fool

Source link

Visited 1 times, 1 visit(s) today

Related Article

The TJX Companies, Inc. Announces 13% Increase in Common Stock Dividend

FRAMINGHAM, Mass., March 30, 2026–(BUSINESS WIRE)–The TJX Companies, Inc. (NYSE: TJX) today announced that its Board of Directors has raised the amount of its quarterly dividend by 13% from the last dividend paid. The Board declared a regular quarterly dividend in the amount of $.48 per share, payable June 4, 2026, to shareholders of record

Market Timing Is Overrated: Here’s Why

Buy low and sell high. Investors are certainly familiar with this popular adage regarding the stock market. It seems so simple. And of course, who doesn’t want to be able to successfully jump in and out of stocks? But this implies, at a high level, that you can properly time the market. While alluring, this

Spotify (SPOT) Fell Due to Concerns Around Pricing Actions

Janus Henderson Investors, an investment management company, released its “Global Sustainable Equity Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the fourth quarter of 2025, global equity markets experienced a significant upswing, with many indices hitting new all-time highs. Resilient equity markets, favorable monetary policies, and ongoing momentum

3 Penny Stocks With Market Caps Under $400M To Watch

Over the last 7 days, the United States market has dropped 1.9%, while showing a notable 15% rise over the past year, with earnings expected to grow annually by the same percentage. In such a fluctuating market, identifying stocks with strong fundamentals and growth potential becomes crucial for investors seeking stability and opportunity. Penny stocks,

How March Madness Brackets Explain the AI-Driven Stock Market Right Now

There you have it, folks. The inaugural First Trade stock bracket semi-finals are set. Second-seeded Apple (60%) was voted as the stock you’d rather own over the next 10 years, beating Tesla (40%) with relative ease. That rounds out a Final Four that also includes Nvidia, Amazon, and Alphabet. Now for the first semi-final. Which

Could Investing $10,000 in VYMI Make You a Millionaire?

There’s no guaranteed way to become a millionaire, but investing in stocks can be one of the best. The stock market has delivered average annual returns of 10% for the past 50 years. (That includes up years and down years.) If you invested $10,000 in the S&P 500 index and could earn 10% average annual

How The Story On Landsec (LSE:LAND) Is Shifting As Analysts Turn More Cautious

Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE. Price targets around £6.70 sit just below a fair value estimate that has edged from £7.05 to about £7.03 per share, signalling only a slight

3 Stocks That May Be Priced Below Their Estimated Value

Amid the recent volatility driven by geopolitical tensions and fluctuating energy prices, Asian markets have been navigating a complex landscape that has influenced investor sentiment across the region. As investors seek opportunities in this environment, identifying stocks that may be priced below their estimated value can be an effective strategy for capitalizing on potential market

Intraday chart for The Hong Kong and China Gas Company Limited

Goldman Sachs upgrades Nokia to Neutral from Sell, sets price target at 8 euros – BN

Market Closed – Nasdaq Helsinki 01:00:00 2026-03-27 pm EDT 5-day change 1st Jan Change 6.866 EUR -5.06% -0.72% +23.22% Published on 03/30/2026 at 12:07 am EDT Finwire – Translated by Marketscreener Legal disclaimer Contact us to request a correction – See original Goldman Sachs upgrades Nokia to Neutral from Sell, sets price target at 8

This Will Be Palantir’s Stock Price in 2030

Palantir (NASDAQ: PLTR) has been one of the market’s top performers since the AI investment trend began in 2023. If you purchased $10,000 worth of its shares at the start of 2023 and held on, that stake would now be worth nearly $223,000. However, as of the close on Friday, the stock had also declined

The Only Stock Warren Buffett Is Clearly Buying Right Now

Warren Buffett was a net seller of stocks for 13 consecutive quarters before stepping down as CEO of Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB) at the end of 2025. Don’t think for a second that the legendary investor has retired, though. New Berkshire CEO Greg Abel recently disclosed that Buffett still comes into the office

Stock P/Es Discounting Higher-For-Longer Oil Prices & Interest Rates

The fog of war is getting thicker because of the likelihood of US boots on the ground (the “bog of war”). The US Department of War has deployed 15,000 troops to the war zone, raising the risks of a longer war and more American casualties, which will cause an uproar in the US. On Tuesday,

Reflecting on a widely panned contrarian stock market call from 2011🔮

📉The stock market fell last week, with the S&P 500 shedding 2.1% to end at 6,368.85. The index is now down 8.7% from its Jan. 27 closing high of 6,978.60 and down 7.0% year-to-date. For more on the stock market, read: If you think things are bad now, just keep in mind that they could

How the Stock Market Performs After a Correction

I wrote piece last week called A Short History of Stock Market Pullbacks to show how often stocks are down certain levels over time: I like to do this when the stock market falls just as a reminder that it’s completely normal. Here’s the natural follow-up question I received: Do you have any charts or data

0
Would love your thoughts, please comment.x
()
x