What Happened?
A number of stocks jumped in the afternoon session after Trump's Iran peace signal offered more credible prospect of ending a three-month supply-chain disruption that squeezed manufacturers, logistics companies, and commodity processors since the Strait of Hormuz effectively closed in late February.
Cyclical stocks led the broader rally, with the VIX falling 12.5% to 19.44, a sign that investors were broadly repricing geopolitical risk lower. The Strait handles roughly 20% of global seaborne oil; its closure forced rerouting at significant cost while elevating energy-input costs for industrial producers. Lower oil, WTI at $87.71 from a wartime peak near $100, directly reduces operating costs across manufacturing, chemicals, and transportation. The rate hike probability falling from 51% to 36% additionally improved the financing environment for capital-intensive industrials that have deferred investment decisions.
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:
- Renewable Energy company Shoals (NASDAQ: SHLS) jumped 6%. Is now the time to buy Shoals? Access our full analysis report here, it’s free.
- Construction and Maintenance Services company Construction Partners (NASDAQ: ROAD) jumped 7%. Is now the time to buy Construction Partners? Access our full analysis report here, it’s free.
- Professional Tools and Equipment company Hyster-Yale Materials Handling (NYSE: HY) jumped 6.7%. Is now the time to buy Hyster-Yale Materials Handling? Access our full analysis report here, it’s free.
Zooming In On Construction Partners (ROAD)
Construction Partners’s shares are quite volatile and have had 19 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 3 months ago when the stock dropped 8.3% on the news that geopolitical tensions in the Middle East escalated, sent oil prices soaring and reignited inflation concerns.
The Dow Jones Industrial Average fell over 1,000 points as the conflict involving the U.S. and Iran disrupted global energy markets, particularly through crucial shipping routes like the Strait of Hormuz. A barrel of Brent crude, the international benchmark, rose toward $85, stoking fears of a new wave of inflation.
This spike in energy costs puts the Federal Reserve in a difficult position, as it may complicate future monetary policy decisions and delay potential interest rate cuts. The broad-based sell-off hit multiple sectors, with airline and retail stocks falling sharply on concerns of higher fuel costs and reduced consumer spending power.
Construction Partners is up 1.5% since the beginning of the year, but at $113.83 per share, it is still trading 19% below its 52-week high of $140.48 from May 2026. Investors who bought $1,000 worth of Construction Partners’s shares 5 years ago would now be looking at an investment worth $3,382.
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