3 Best Defense ETFs amid Fragile Negotiations Between the U.S. and Iran

FomoAnxiety · 2026-03-27T00:22:37+00:00

President Trump claims Iran's passage of oil tankers through the Strait of Hormuz signals progress in U.S.-Iran negotiations, despite Iran denying direct talks. The article suggests defense ETFs for investors amid ongoing tensions, highlighting that analysts favor XAR for growth potential.

FomoAnxiety

2026-03-27 00:22:37

Abstract generation in progress

President Donald Trump said Iran allowed 10 oil tankers to pass through the Strait of Hormuz this week as a “present” to the United States, which he described as a sign that negotiations may be moving in the right direction. According to Trump, the move was meant to show the U.S. that Iran is “real and solid,” especially as tensions remain high. Nevertheless, for investors looking to hedge against an escalation through the defense sector, defense ETFs to consider are:

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Invesco Aerospace & Defense ETF PPA -2.23% ▼
iShares U.S. Aerospace & Defense ETF ITA -2.54% ▼
SPDR S&P Aerospace & Defense ETF XAR -3.59% ▼

This also clears up earlier comments he made about Iran giving the U.S. a “present” tied to oil and gas. At the same time, Trump claimed the U.S. is engaged in “very substantial talks” with Iran, even though Tehran has publicly denied that direct negotiations are taking place. Meanwhile, U.S. Special Envoy Steve Witkoff explained that there have been multiple outreach efforts from different countries trying to help end the conflict peacefully.

He confirmed that the U.S. has already proposed a 15-point peace framework, which was delivered through Pakistan, which is acting as a mediator. However, Iran has pushed back, with state media reporting that Tehran rejected the U.S. ceasefire proposal and instead submitted its own conditions. Notably, Iran wants sovereignty over the Strait of Hormuz, a critical oil route that has been disrupted for nearly four weeks.

Which Defense ETF Is the Better Buy?

Turning to Wall Street, out of the three ETFs mentioned above, analysts think that XAR has the most room to run. In fact, XAR’s price target of $327.80 per share implies 27.3% upside potential.

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