Investing.com -- Several U.S. defense stocks fell in premarket trading on Wednesday following the U.S.-Iran ceasefire agreement, while a report suggested the Pentagon’s war funding request will be drastically reduced.

The administration is expected to significantly scale back its plan to seek additional war funding, with the total likely to fall between $80 billion and $100 billion, The Washington Post reported, citing U.S. officials and others familiar with the matter.

The figures represent less than half of the more than $200 billion the Pentagon had initially proposed to the White House last month.

Shares in major U.S. defense firms Lockheed Martin and Northrop Grumman fell 1.3% and 1% by 07:40 ET, respectively. L3Harris Technologies also edged slightly lower.

President Trump announced late Tuesday that he had agreed to suspend planned attacks on Iranian infrastructure for two weeks, conditional on Iran’s immediate reopening of the Strait of Hormuz.

The announcement came less than two hours before Trump’s self-imposed deadline, marking a sharp turnaround from his earlier threat to wipe out "a whole civilization" if Tehran did not reopen the Strait, which handles about one-fifth of global oil trade.

Trump, who had issued a series of threats in recent weeks before pulling back, said progress in talks had prompted him to agree to the pause. Iran had presented a 10-point proposal that he described as a "workable basis" for negotiations, and he expected a deal to be finalized within the two-week window.

Iranian Foreign Minister Abbas Araghchi said on behalf of the country’s Supreme National Security Council that Tehran’s armed forces will "cease their defensive operations."

The de-escalation sent crude prices sliding nearly 14% and sparked a broad market rally, with Wall Street futures rising more than 2% and equity indexes across Asia and Europe also climbing.

Alongside defense names, U.S. energy stocks also fell as oil prices declined.