The war of words between North Korea and the United States had many traders on edge Wednesday. But investors in defense stocks were profiting even as the broader market fell.
Shares of several companies that have big contracts with the U.S. military rose after President Trump warned that North Korea would face "fire and fury" if it did not back down from threats to use nuclear weapons against the U.S.
Shares of Lockheed Martin(LMT), Raytheon(RTN), Northrop Grumman(NOC) and L3 Technologies(LLL) hit record highs Wednesday.
The defense sector has been a big market winner during the past few months. The iShares U.S. Aerospace & Defense ETF(ITA) is up 30% since the election.
Many investors felt that defense stocks were great buys even before Trump's win.
Kevin Miller, CEO and portfolio manager of the E-Valuator Funds, said his firm has invested more heavily in mutual funds that have increased their investment in defense stocks lately. But, he said the decision wasn't tied to North Korea as much as the possibility of other global conflicts.
"We live in a troubled world. Don't doubt that Iran is watching how things play out with North Korea," Miller said. "There is always going to be some hot spot around the globe."
CNNMoney (New York) First published August 9, 2017: 11:48 AM ET