Estimated reading time: 5 minutes
Stocks to Invest in During Times of War
War does not create a single stock trade. War typically redefines the parts of the market that are able to withstand an oil shock, growing inflation concerns, and a shift in investor appetite away from risk. Recent reports by Reuters confirm that the conflict in Iran is already responsible for sending U.S. crude above $110 a barrel, increasing inflation concerns, and making markets more vulnerable to energy-related events. Morgan Stanley separately argued that, in an environment with growing risks of inflation spikes, investors should take a closer look at real assets such as energy to use them as an inflation hedge.
For this reason, professionals often focus on certain sectors rather than speculate on growth stocks when a war starts. These sectors are the ones that either benefit from increased defense spending, profit from rising commodity prices, or offer stable demand during uncertainty. Reuters, for instance, mentioned that the current volatility has already attracted investor interest to defensive sectors, including utilities and consumer staples. Barron’s confirmed that recent market dynamics revealed the advantage of utilities, staples, and energy when war concerns increase.
Defense Stocks, Energy Stocks, Utilities, Consumer Staples, and Healthcare
When it comes to war-related stocks, the first choice for many investors and analysts is the defense sector. Barron’s reported that Scott Mikus of Melius upgraded RTX to Buy and raised estimates on Lockheed Martin, General Dynamics, and Northrop Grumman based on expected missile replenishment, increased defense budgets, and new contract wins. Reuters also reported that the White House plans to submit a budget proposal requesting the highest-ever increase in defense spending for fiscal 2027, with major funding going to missile defense, fighter jets, ships, and submarines. Given this information, RTX, Northrop Grumman, and General Dynamics seem to be some of the strongest candidates among contractors due to their direct ties to current missile replenishment and future procurement.
However, this does not mean that defense stocks automatically generate gains during times of war. In many cases, some initial gains may appear quickly and may not necessarily be followed by further profits. Barron’s mentioned that commercial aerospace can outperform defense in terms of earnings growth, despite the latter having a positive outlook because of rising military spending. This issue is important because purchasing a stock that has already experienced significant growth after a war announcement can prove less profitable than buying one in advance. Defense is a good option during war, yet timing and price still matter.
One of the most logical options after defense is the energy sector. Reuters has repeatedly connected today’s stock market pressure to rising oil prices, and Morgan Stanley explicitly recommended using energy as an inflation hedge. During war-related events that affect production or shipping routes, integrated oil producers or infrastructure names can benefit from higher oil prices and improved cash flow. For this reason, Exxon Mobil and Chevron are typical candidates that are often added to watchlists when a new geopolitical conflict begins. These are not really war stocks in the same way as defense companies. However, they remain some of the clearest options for equity gains during conflicts that push oil higher.
While less discussed in the media, utilities remain a valuable part of a portfolio in terms of volatility management. According to Morningstar, the Morningstar US Utilities Index is up 5.25% in 2026 through late March. Analysts also listed Edison International, PG&E, American Water Works, Essential Utilities, Duke Energy, Eversource, Portland General Electric, Alliant Energy, and American Electric Power as some of the most undervalued utility stocks. Reuters and Barron’s also confirmed that investors rotated toward utilities during recent volatility driven by war. Investors who seek stability rather than a direct tie to oil prices can consider utilities such as Duke Energy or American Electric Power, given that electricity consumption does not depend heavily on the news cycle.
Consumer staples can also become a strong choice during wartime investing. While describing staples as a classic safe haven within equities, Reuters and Morningstar mentioned that consumer defensive stocks had proven to be one of the strongest segments of the market this year, with leading players including Walmart and Costco. Mike Mussio of FBB Capital Partners stated in February that energy and consumer staples contributed to buffering market weakness. Therefore, stocks such as Walmart, Costco, and Procter & Gamble become relevant when war creates worries about growth and market stability. However, the main issue is valuation, since Reuters mentioned that staples had rallied enough to raise questions about whether future earnings can justify their rich multiples.
Another option that investors might prefer during war is healthcare, given the ability of these businesses to provide consistent demand, reliable cash flow, and stable balance sheets regardless of economic conditions. According to Morningstar’s 2026 healthcare outlook, Johnson & Johnson has proven itself to be one of the strongest stocks in the sector due to diversified revenue, a strong pipeline, and robust cash flow. While healthcare was not one of the leading sectors during every recent session, it still belongs to the group that attracts interest when volatility rises and growth prospects weaken. For investors looking for a large and solid healthcare name, Johnson & Johnson remains a clear example.
What To Invest In During War (2026)
When it comes to choosing the best stocks to invest in during times of war, the focus should primarily be on defense contractors benefiting from increased military spending, energy companies profiting from oil spikes, utilities offering stability during growing volatility, consumer staples selling necessities, and healthcare stocks providing reliable demand and cash flow. The most recent analysis from Reuters, Barron’s, Morningstar, and Morgan Stanley provides clear support for this approach rather than the generic idea of buying anything related to war. It can be useful to keep an eye on RTX, Northrop Grumman, General Dynamics, Exxon Mobil, Chevron, Duke Energy, American Electric Power, Walmart, Costco, and Johnson & Johnson.