The Iran war has pushed inflation to near 4%, well above the Federal Reserve’s target, and sent the 10-year U.S. Treasury yield up to around 4.75%. As yields rose, the 30-year fixed mortgage rate climbed from below 6% before the war to nearly 7%. On a $320,000 loan, that translates to roughly $210 more in monthly payments. The bond market is also facing heavy supply pressure as the U.S. annual budget deficit is expected to exceed $2 trillion, or more than 6% of GDP.

Carpenter Technology shares are up 125% in 2024, far outpacing the S&P Aerospace & Defense Select Industry Index’s 44% gain. The company supplies specialty metals such as high-temperature alloys used by Boeing, Airbus and SpaceX, and its 2024 Q1 results showed sales and profit ahead of expectations. It has shifted capital spending toward new furnace equipment while maintaining dividends. With a market value of about $30 billion, investors are pricing in strong structural growth expectations tied to aerospace and defense supply chains.