What Happened?
A number of stocks fell in the afternoon session after the broader market fell as a spike in oil prices and Treasury yields rattled investors.
The sell-off was triggered by escalating geopolitical tensions related to the Iran conflict, which pushed oil prices up. This surge in energy costs fueled concerns about war-related inflation, leading to a significant reaction in the bond market.
The 10-year Treasury note yield jumped nine basis points to 4.57%, its highest level in a year. Investors were concerned that persistent inflation could lead to further interest rate hikes, putting pressure on corporate valuations and prompting a pullback from record highs.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Electronic Components company Allient (NASDAQ: ALNT) fell 2.9%. Is now the time to buy Allient? Access our full analysis report here, it’s free.
- Infrastructure Distributors company Watsco (NYSE: WSO) fell 2.9%. Is now the time to buy Watsco? Access our full analysis report here, it’s free.
- Inspection Instruments company Keysight (NYSE: KEYS) fell 2.8%. Is now the time to buy Keysight? Access our full analysis report here, it’s free.
- Home Construction Materials company Gibraltar (NASDAQ: ROCK) fell 2.7%. Is now the time to buy Gibraltar? Access our full analysis report here, it’s free.
- Construction and Maintenance Services company Limbach (NASDAQ: LMB) fell 2.7%. Is now the time to buy Limbach? Access our full analysis report here, it’s free.
Zooming In On Watsco (WSO)
Watsco’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock dropped 3.9% on the news that markets continued to decline, as investors grew cautious ahead of a key speech by Federal Reserve Chair Jerome Powell.
The move came as U.S. equity markets recorded a fifth consecutive day of losses for major indexes like the S&P 500, with technology stocks experiencing the largest declines. Investors have grown wary that the sharp rally in the tech sector since April may have advanced too far.
The market-wide caution was largely driven by the Jackson Hole symposium, a meeting of central bankers, where traders are anxiously awaiting Fed Chair Powell's speech on Friday for guidance on the future path of interest rates.
Watsco is up 16.2% since the beginning of the year, but at $403.76 per share, it is still trading 18% below its 52-week high of $492.17 from May 2025. Investors who bought $1,000 worth of Watsco’s shares 5 years ago would now be looking at an investment worth $1,359.
WHILE YOU’RE HERE: The Next Palantir? One satellite company captures images of every point on Earth. Every single day. The Pentagon wants it. Hedge funds are using it to beat earnings. You’ve probably never heard of it.
This is what the early days of Palantir looked like before it became a $437 billion giant. Same playbook. Different technology. If you missed Palantir, you need to see this. Claim The Stock Ticker for Free HERE.
