What Happened?
A number of stocks fell in the afternoon session after April CPI came in hot at 3.8% year-over-year, pushing the 10-year Treasury yield to 4.43% and effectively sealing higher-for-longer mortgage rates.
The 30-year fixed was at 6.45% earlier in the week, and reports revealed existing home sales growth fell below analyst expectations. April's median existing home price hit a record $417,700. With CPI confirming inflation persistence, builders could not count on rate relief to revive demand. Homebuilders need two things to grow: affordable mortgage rates that bring buyers into the market and manageable input costs.
Mortgage rates track 10-year Treasury yields almost directly; when yields rise on hot CPI, mortgage payments rise, and the share of households who qualify to buy shrinks.
Construction inputs, asphalt, plastics, lumber, equipment fuel, also tend to rise with general inflation. With sentiment at a seven-month low and over one-third of builders already cutting prices to move inventory, the CPI removes the rate-cut catalyst that would have restored buyer demand in the second half of the year.
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:
- Engineering and Design Services company Sterling (NASDAQ: STRL) fell 6.1%. Is now the time to buy Sterling? Access our full analysis report here, it’s free.
- Construction and Maintenance Services company Construction Partners (NASDAQ: ROAD) fell 5%. Is now the time to buy Construction Partners? Access our full analysis report here, it’s free.
- Energy Products and Services company FTAI Infrastructure (NASDAQ: FIP) fell 3%. Is now the time to buy FTAI Infrastructure? Access our full analysis report here, it’s free.
- Engineering and Design Services company MasTec (NYSE: MTZ) fell 3.3%. Is now the time to buy MasTec? Access our full analysis report here, it’s free.
- Energy Products and Services company Ameresco (NYSE: AMRC) fell 6.3%. Is now the time to buy Ameresco? Access our full analysis report here, it’s free.
Zooming In On Ameresco (AMRC)
Ameresco’s shares are extremely volatile and have had 40 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not 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 gained 39.4% on the news that the company reported strong second-quarter financial results that significantly surpassed analyst expectations.
The clean energy company posted second-quarter revenue of $472.3 million, an 8% jump from the year-ago period. More impressively, its non-GAAP earnings per share of $0.27 crushed Wall Street's expectations by 350%. Company officials credited the strong results to growth in its European business and its Energy Asset division. Investors also cheered the firm's record total project backlog, which increased to $5.1 billion, a strong indicator of future revenue. The positive report prompted at least one analyst to raise their price target for the stock.
Ameresco is down 6.6% since the beginning of the year, and at $28.64 per share, it is trading 33.8% below its 52-week high of $43.23 from October 2025. Investors who bought $1,000 worth of Ameresco’s shares 5 years ago would now be looking at only $601.96.
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