A broker representing US Defence Secretary Pete Hegseth considered investing in defense stocks worth millions just before a US-Israel strike on Iran. The broker, from Morgan Stanley, reached out to BlackRock in February to discuss investing in a defense-focused ETF linked to companies like Lockheed Martin and Northrop Grumman. These firms tend to profit from increased military spending during times of geopolitical tensions and military actions, as per the Financial Times via Xinhua news agency.
The investment plan did not materialize due to platform constraints at Morgan Stanley. However, the timing has drawn attention, especially considering Hegseth’s significant role in shaping US policy towards Iran. The Pentagon refuted the report, labeling it as inaccurate and calling for a retraction. Chief Pentagon Spokesman Sean Parnell dismissed the claim as baseless and aimed at misleading the public, as stated on social media.
The news surfaced amidst a broader examination of trades conducted in financial and prediction markets before major policy decisions by US President Donald Trump. Trump reportedly expressed readiness to end the US-Israeli conflict with Iran, even if the Strait of Hormuz remains mostly closed. The Wall Street Journal, citing Trump administration officials, revealed that Trump and his team assessed that attempting to reopen the vital energy passageway could prolong the conflict beyond their anticipated timeline of four to six weeks.
Therefore, the President opted to concentrate on key objectives such as weakening Iran’s naval capabilities and missile stockpiles while diplomatically pressuring Tehran to restore trade flow through the strait. If these diplomatic efforts fail, the White House plans to urge European and Gulf allies to lead the initiative to reopen the strait.
