On Wednesday, newly installed Secretary of Defense Pete Hegseth reportedly told the Pentagon it needs to find $50 billion worth of programs to cut next year. But the cuts won't end there. As CBS reports, the Trump administration intends to keep cutting defense spending at an average rate of 8% per year, over the next five years.

Investors are probably better off not overreacting to daily news headlines. Then again, certain headlines and resulting declines in stock prices can set up entry points for long-term investors.

Uncertainty over cuts to military spending have hammered key contractors in recent weeks. The worst-feared scenario doesn’t seem to be happening, though.