NEW YORK (TheStreet) -- U.S. stocks are piecing together a solid two-day rally so far, with the S&P 500 up 0.5% on Wednesday. Helping boost those gains are General Dynamics (GD) - Get Report and NorthropGrumman (NOC) - Get Report, which are both up around 5% after beating on earnings estimates.
On CNBC's "Stop Trading" segment, he explained that the U.S. is no longer the world's police force, meaning other countries are having to spend big money in order to boost their defense.
Investors had low expectations for General Dynamics' Gulfstream jets, which came in much stronger-than-expected as its backlog piled up with orders, Cramer added.
General Dynamics also bought back a lot of stock in the quarter and significantly raised its full-year earnings guidance. Northrop Grumman raised earnings per share estimates for next quarter.
Cramer reiterated how well General Dynamics and Northrop Grumman are with an expected increase in global defense spending.
At the time of publication, Cramer's Action Alerts PLUS had no position in companies mentioned.