I think it's a combination of the market not believing the reality of the unprecedented policy shift and things only getting clearer the last ~2 weeks. If you look at that time frame, US defense stock is definitely suffering: https://finance.yahoo.com/sectors/industrials/aerospace-defe... especially if you compare this to Korean (https://finance.yahoo.com/quote/KDEF/) or European defense stock (https://finance.yahoo.com/quote/EUAD/ and https://finance.yahoo.com/quote/RNMBY/ for a longer perspective since EUAD is new). A large portion of that money could have gone to the US defense sector, but that's not an option anymore.

If you look at European arms manufacturers you'll see that their stock prices have gone up substantially (take Rheinmetall for example, up 169% YoY). But always remember, the stock price can be wrong, and when a downward correction comes to disabuse optimism it tends to be painful.

Because nothing the OP stated is true... The difference between a superior product in war is the difference between winning and losing, not a cost control mechanism. a f35 would destroy a fleet of other aircraft, VTOL land on an aircraft carrier, and be launching a second volley before any other aircraft even had radar signature of the f35.

>We don’t want the US’ stuff anymore and the only thing that can save that relationship is full software control.

This is not how this works... You do have full software control when doing deals of this size. However, that does not mean that you have to provide software updates. The program in question is about find the different frequency's the russians are using so the f-16 can continue it's jamming capabilities. This is not "Full source control" It's whether the US should be using US Cyber Assets to be manually update the frequency's detected.

Because stock prices and the people's interests they reflect only care about immediate returns that allow investors to then dump those returns into the next immediate returning investment again, to maximize return with no consideration for the overall health of the system they operate in. Capitalism. Long term health of the stock systems. Long term health of the underlying value they reflect. Nothing long term matters in a stock buy at all.

Why do you even ask this question, did the answer really not seem obvious, or was it rhetorical?