While the ratcheting up of United States-Iran tensions has added to the gloom surrounding the global economy, at least one industry is unlikely to share the despondency: defense, one of the few that may benefit over the longer term.

In the immediate aftermath of the American airstrike that killed a top Iranian military official near Baghdad Airport, industry stocks have been rising on Wall Street, bucking the general trend.

Shares of defense and aerospace giants Lockheed Martin Corporation and United Technologies Corporation reached record highs on Friday, the day of the assassination. Stocks of other contractors like Northrop Grumman and Raytheon have also been moving up.

The movement was reflected in the SPDR S&P Aerospace & Defense ETF XAR, an industry index, which hit a 52-week high in the days following the attack.

The bosses of America's increasingly influential military-industrial complex must be licking their chops in anticipation of increased U.S. defense spending for which stock analysts say the growing tensions could create more backing.

Trump's military splash

The U.S. already spends more on national defense than China, Saudi Arabia, India, France, Russia, the United Kingdom and Germany, according to widely published figures. 

President Donald Trump has raised military expenditure in each of his budgets since entering the White House, even as the country's deficit balloons.

In December, the president signed off on a budget of 738 billion U.S. dollars for fiscal year 2020, about 22 billion dollars more than 2019.

There was accompanying talk of possible cuts or certainly a tapering off in the future, including for an account used to fund active military operations called Overseas Contingency Operations. But that could now change.

"Overseas Contingency Operations was likely on a lower trajectory over the next several years," wrote Cowen and Company analyst Roman Schweizer in a note to investors last Friday. "We doubt that's the case now." 

Voices are, however, being raised against a reversal.

William Hartung, the director of the Arms and Security Project at the Center for International Policy, said on Tuesday that efforts should be made to ensure that the current situation is not exploited to underwrite an across-the-board increase in tax dollars for a Pentagon department "that is already substantially overfunded." 

War generates wealth for some

Professor Robert Reich, a political commentator who served in Bill Clinton's cabinet, took up the same line last week when he said, "As Trump stokes tensions around the world, he is adding fuel to the fire by demanding even more Pentagon spending. It's a dangerous military buildup intended to underwrite endless wars and enrich defense contractors while draining money from investments in the American people."

December's release of the so-called Afghanistan Papers laid bare how a cycle of military bungling and corruption has helped to fuel the military-industrial complex. 

In relation to the war in Afghanistan, Michael Flynn, Trump's former national security adviser, spoke of "a machinery that is behind what we do and it keeps us participating in the conflict because it generates wealth." 

Wealth for the defense industry primarily, that is.

The U.S. has spent a scarcely believable 6.4 trillion dollars on post-9/11 wars and military action in Afghanistan, Iraq, Syria and Pakistan, a report by the Watson Institute of International and Public Affairs at Brown University said in November.

Historically, Middle East conflicts have been good for defense stocks, averaging a 6.7 percent return after 19 crisis events in the region over the past three decades, compared to the average 3.3 percent return for the S&P 500, according to data from CNBC Kensho.

Spending may be campaign issue

More recently, and before the latest flare-up between the U.S. and Iran, industry stocks have been performing better than the broader market despite trade conflicts, currency fluctuation and low interest rates globally. JP Morgan even said last August that they had become a haven again.

But the company is not advising a new splurge just yet. "An all-out war would bring much more spending but we believe both sides seek to avoid this, even if it is a possibility," JP Morgan analyst Seth Seifman wrote on Monday. "With so many unknowns, however, we are reluctant at this time to embrace last week's U.S. strike as an opportunity to buy defense stocks more aggressively with a longer time horizon."

For good or ill, the spending issue could surface in the American presidential campaign. Presidential candidates Bernie Sanders and Elizabeth Warren are among Democrats who have called for cuts but they could be under pressure to maintain that position if things get worse in the Gulf.

U.S. politicians are not without blame for the unrelenting growth of the military industry. It is not by accident that the military-industrial complex is sometimes referred to as the "military-industrial-congressional complex."  

But given the wealth that the industry generates, as noted by Michael Flynn, few feel able to say no to it. For a firm like Lockheed Martin, American government contracts account for 70 percent of its revenues. So the stakes are high. Increased tensions in the Middle East will make saying yes even easier.

Top Photo: A woman holds a placard in Times Square, New York  on Jan. 4 , 2020, at a protest against the U.S. military attack that killed a top Iranian general and Iraqi militiamen and sharply escalated tensions across the region. (AP Photo)