The Financial Times reported on March 30, 2026, citing three people familiar with the matter, that Defense Secretary Pete Hegseth's broker at Morgan Stanley contacted BlackRock in February 2026 about making a multimillion-dollar investment in BlackRock's iShares Defense Industrials Active ETF, shortly before the US launched military action against Iran. The bombing began on February 28. The fund targets companies that may benefit from higher defense spending, and its holdings include RTX, Lockheed Martin, Boeing and Northrop Grumman. According to the FT, the inquiry was sensitive enough to be flagged internally at BlackRock.
The investment did not go ahead because the fund was not yet available to Morgan Stanley clients. The FT report did not say how much discretion the broker had to invest on Hegseth's behalf, or whether Hegseth knew what the broker was doing. Chief Pentagon spokesman Sean Parnell called the story “entirely false and fabricated,” said “Neither Secretary Hegseth nor any of his representatives approached BlackRock about any such investment,” and demanded a retraction. BlackRock declined to comment.
Economist Justin Wolfers wrote that “in a functional democracy, he would offer his resignation tonight.” The report came amid wider scrutiny of well-timed trades in financial and prediction markets ahead of Trump's major policy decisions, which has led some experts to ask whether information leaked ahead of time.
Sourcing note: the account rests on the FT's three unnamed sources and has not been independently confirmed; the Pentagon denies it.
Correction (October 14, 2026): An earlier version listed Palantir among the fund's holdings; reporting names RTX, Lockheed Martin, Boeing and Northrop Grumman. It also asserted that the attempt “reveals the intent” of a Defense Secretary with advance knowledge of the war. The FT did not report whether Hegseth knew of his broker's inquiry, so that claim was removed. References to a $580 million oil futures trade and a $3 trillion market swing, which no source for this entry supports, were also removed. Two dead links (FT and Guardian URLs) were replaced.