Lockheed Martin ( LMT -5.02%), the giant defense stock that makes America's vaunted F-16, F-22, and F-35 fighter jets, tumbled 5.5% through 11:40 a.m. ET Wednesday morning. And why? As Bloomberg reports, the U.S. Pentagon is reducing its budget request for new F-35 stealth fighter jets in fiscal year 2026.

Lockheed Martin is developing an advanced F-35 that can fly without a pilot. The CEO said it would be half the cost of a sixth-generation fighter.

F-35 fighter jets will cost approximately C$27.7 billion ($20.2 billion), nearly 50% more than initially estimated, according to a government audit released Tuesday.

So Lockheed Martin is likely to like the president's proposals (both of them). The more so seeing as it's been only a couple of months since the Air Force handed Lockheed a rather shocking defeat, when it awarded the $20 billion contract to build a sixth-generation stealth fighter, the F-47, to rival Boeing ( BA 0.96%).

The cost increase was primarily caused by rising inflation, fluctuations in foreign exchange rates, and heightened demand for munitions, the audit found.

U.S. equities gained at midday on better-than-expected consumer inflation news and a trade agreement between the U.S. and China.

Canada's acquisition of 88 F-35 jets from Lockheed Martin is facing a 45% cost overrun and significant pilot shortages, according to the Auditor General. Initially pegged at C$19 billion, the project now risks soaring to C$33.

Chief Executive Elon Musk said his recent attacks on President Trump [went "too far."](

A Wisconsin lawmaker is frustrated with how loud the F-35s flying out of Truax are and the difficulties in securing relief from the noise pollution.