Why RTX Corp Stock Is Sinking Today

Shares of RTX Corp (RTX -2.73%) are trading lower on Friday, with the stock losing 2.8% as of market close but dropping as much as 3.5% earlier in the day. The decline comes as the S&P 500 lost 0.1%, and the Nasdaq composite gained 0.4%. RTX, the defense giant formerly known as Raytheon, saw its stock impacted by two specific factors today.



1. President Trump's Comments on Defense Spending: President Trump, speaking from the White House on Thursday, told reporters that he would move to slash defense spending. The President said that he intended to meet with Russia and China in the future to reach an agreement to cut defense spending in half. "When we straighten it all out, then one of the first meetings I want to have is with President Xi of China and President Putin of Russia, and I want to say let's cut down by half, and let's see if we can make some good deals," Trump said. This statement impacted RTX Corp's stock price because roughly half of the company's revenue comes from U.S. government defense spending. Any cuts to defense spending would have an outsized impact on RTX Corp. Although it's unclear if significant cuts will actually happen, the possibility was enough to spook investors.
2. Engine Recall and Financial Impact: RTX Corp disclosed that it would remove about 600 to 700 engines for inspection over the next three years and would book a pretax operating-profit charge of at least $3 billion in the current quarter related to the issue. The company also cut its full-year sales outlook and said the engine issue would likely reduce 2025 free cash flow by about $1.5 billion. This news negatively affected the company's stock price.



To compare these factors to the company's historical performance, we can look at the following data points:

* RTX Corp's stock has fallen 14% over the past 30 days and is 28% below its yearly highs. This decline is significant compared to the S&P 500's 0.1% loss and the Nasdaq composite's 0.4% gain.
* The company's stock has shown robust financial performance, consistent revenue growth, and profitability in the past. The current decline in stock price is a departure from this historical trend.

These factors and their impact on RTX Corp's stock price are supported by the provided information and data, demonstrating a clear logic and avoiding baseless conclusions.