A broad selloff swept through aerospace and defense stocks during Thursday’s afternoon trading session as surging oil prices and rising long-term interest rates intensified fears of slowing industry orders.
The turbulence was triggered by President Donald Trump’s announcement of “Economic Warfare” against Iran, which pushed Brent crude oil to $93.55 a barrel, according to CNBC.
At the same time, the 10-year Treasury yield climbed above 4.7% after Federal Open Market Committee minutes revealed officials were prepared to tighten monetary policy if inflation failed to cool.
For commercial aerospace, surging crude oil prices drive up jet fuel costs, one of the most significant variable expenses airlines must manage across their operations.
Higher Treasury yields simultaneously increase financing costs for aircraft leasing, squeezing operating margins across the sector from multiple directions at once.
When margins compress, airlines typically respond by delaying fleet upgrades and deferring aftermarket maintenance contracts, creating a ripple effect for manufacturers and suppliers.
Curtiss-Wright (NYSE: CW) fell 3.8% in the session, while space infrastructure firm Redwire (NYSE: RDW) dropped 7.1%, among the steepest declines in the group.
Rocket Lab (NASDAQ: RKLB) declined 4.8%, Astronics (NASDAQ: ATRO) fell 6.2%, and Woodward (NASDAQ: WWD) also dropped 4.8% during the afternoon session.
Redwire’s decline stands out given the stock’s history of sharp moves, having recorded 98 price swings greater than 5% over the past year alone.
Just two days prior, Redwire shares dropped 5.2% following a weaker-than-expected U.S. industrial production report for July, adding to a difficult stretch for the company’s stock.
Federal Reserve data showed U.S. industrial production rose only 0.2% in July, falling short of the 0.4% increase that analysts polled by The Wall Street Journal had anticipated.
Manufacturing output also posted a modest 0.2% gain, raising broader investor concerns about cooling economic activity and softening demand for industrially produced goods.
Despite Thursday’s losses, Redwire remains up 30.6% since the start of the year, though at $11.79 per share it still trades 54.5% below its 52-week high of $25.90 reached in May 2026.
Investors who placed $1,000 into Redwire shares five years ago would be holding a position now valued at $1,172, reflecting modest but positive long-term returns through significant volatility.
Until fuel prices stabilize and borrowing costs retreat, carriers are expected to freeze capital expenditures, keeping aerospace manufacturers and suppliers under sustained financial pressure.
