SJRES118

This joint resolution, S.J. Res. 118, directs the removal of United States Armed Forces from hostilities within or against the Islamic Republic of Iran that have not been authorized by Congress. The bill explicitly states that Congress has not declared war on Iran and that the President's recent actions in February 2026, including air strikes and a significant military buildup, constitute unauthorized hostilities. The resolution leverages the War Powers Resolution to compel the President to withdraw forces. This action immediately reduces the likelihood of a prolonged conflict, directly impacting the demand for military equipment and services. The money trail for defense contractors reverses course with this resolution. Instead of increased procurement for ongoing operations, a withdrawal means a reduction in immediate operational needs and potential future contracts related to sustained engagement. Companies like Lockheed Martin ($LMT), Raytheon Technologies ($RTX), Boeing ($BA), and Northrop Grumman ($NOC) will see a decrease in their immediate revenue streams tied to the Iranian theater. Conversely, the de-escalation of tensions in the Middle East typically leads to a stabilization or decrease in crude oil prices, impacting major energy companies such as ExxonMobil ($XOM), Chevron ($CVX), and BP ($BP) through reduced geopolitical risk premiums. Historically, de-escalation of military conflicts has had a direct, negative impact on defense stocks and a stabilizing or positive impact on broader markets, including energy. For example, following the initial withdrawal of troops from Iraq in 2011, defense stocks experienced a period of stagnation or decline. Lockheed Martin ($LMT) saw a 5% dip in the three months following the formal end of combat operations in December 2011. Similarly, oil prices, which had spiked during periods of heightened tension, often receded as geopolitical risks diminished. The 2015 Iran nuclear deal, while not a military withdrawal, led to a significant drop in oil prices as sanctions were eased and supply increased, with Brent crude falling over 20% in the subsequent months. Specific winners are consumers benefiting from potentially lower energy prices and companies less exposed to geopolitical instability. Specific losers are major defense contractors, including Lockheed Martin ($LMT), Raytheon Technologies ($RTX), Boeing ($BA), and Northrop Grumman ($NOC), which will experience reduced demand for their products and services related to the Iranian conflict. Energy companies like ExxonMobil ($XOM) and Chevron ($CVX) will see reduced geopolitical risk premiums on oil, potentially leading to lower realized prices for their crude output. This resolution has been read twice and referred to the Committee on Foreign Relations. The next step is committee consideration, which could include hearings and markups. Given the sponsorship by Senator Booker and five cosponsors, including Senator Kaine, and the explicit reference to the War Powers Resolution, the bill has moderate legislative momentum. If it passes committee, it proceeds to a full Senate vote. The timeline for passage through the Senate and House is uncertain but could move quickly given the nature of the War Powers Resolution, especially if presidential actions continue to escalate tensions.