What Happened?

A number of stocks fell in the afternoon session after Iran's missile attack on commercial tankers near the Strait of Hormuz pushed oil prices higher and revived inflation fears, a double blow for the industrial sector squeezed simultaneously by rising fuel costs and rising borrowing costs. 

The Industrial Select Sector SPDR (XLI) fell about 2%, with airlines, machinery, and transports leading the losses; United Airlines slid more than 3%. Brent crude rose toward $75 and WTI to around $71. The damage was broad across cyclicals as electronic-components and renewables names such as Corning, Enphase, and Plug Power fell far harder (7–9%), but the core industrial decline was measured, and notably smaller than the ~5% drop in semiconductors. 

Iran fired at least two missiles at ships transiting Hormuz overnight, striking the Qatari LNG tanker Al-Rekayyat and damaging a Saudi crude tanker, ending a brief one-week truce and reasserting the fragility of the U.S.–Iran interim peace. Because the strait carries roughly 20% of the world's oil traffic, even a limited attack reinjects a geopolitical risk premium into energy prices.

Fuel is a direct and major input for airlines, trucking, freight, machinery, and chemicals, so a jump in crude compresses operating margins immediately, which is why fuel-heavy sub-sectors led the decline. The oil-driven inflation impulse landed just as new Fed Chair Kevin Warsh turned hawkish as his June FOMC stripped the easing bias and nine of eighteen officials penciling in a 2026 hike. That pushed the 10-year Treasury yield to roughly 4.47%. Industrials are unusually rate-sensitive because they finance factories, fleets, and aircraft, so higher yields raise the cost of the capital the sector runs on.

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:

• Building Materials company Valmont (NYSE: VMI) fell 4.6%. Is now the time to buy Valmont? Access our full analysis report here, it’s free.
• Aerospace company Woodward (NASDAQ: WWD) fell 4.8%. Is now the time to buy Woodward? Access our full analysis report here, it’s free.
• Aerospace company ATI (NYSE: ATI) fell 4.7%. Is now the time to buy ATI? Access our full analysis report here, it’s free.

Zooming In On Woodward (WWD)

Woodward’s shares are not very volatile and have only had 9 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 previous big move we wrote about was 22 days ago when the stock gained 3% on the news that the Trump administration announced a new peace deal that would lead to the reopening of the Strait of Hormuz. 

The commercial aerospace story is distinct from the defense story here. Defense spending may moderate as the conflict resolves, but commercial aircraft orders respond to airline profitability. IATA had estimated the industry's 2026 fuel bill could exceed $350 billion, up from $252 billion the year before. With oil falling more than 5%, that cost burden begins to lift and airline margins recover. More profitable airlines are more likely to advance orders and take deliveries on schedule. Gulf carriers operating routes through the now-reopening strait had been among the most disrupted; normalization of those corridors expands the commercial case for additional fleet capacity.

Woodward is up 30.5% since the beginning of the year, and at $405.84 per share, it has set a new 52-week high. Investors who bought $1,000 worth of Woodward’s shares 5 years ago would now be looking at an investment worth $3,318.

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