What Happened?
A number of stocks fell in the afternoon session after geopolitical tensions in the Middle East sent crude oil prices soaring, stoking fears of resurgent inflation.
The price for Brent crude, the international benchmark, leaped over 6% to $82.57 a barrel amid an escalating war with Iran, which has threatened to block the Strait of Hormuz. This critical waterway handles about 20% of global oil flow. A sustained increase in energy prices could translate to higher inflation, potentially impacting consumer spending and corporate earnings. This scenario also complicates the Federal Reserve's path forward, as persistent inflation could delay anticipated interest rate cuts that investors have been counting on to support the economy.
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 FuelCell Energy (NASDAQ: FCEL) fell 3.4%. Is now the time to buy FuelCell Energy? Access our full analysis report here, it’s free.
- Renewable Energy company Enphase (NASDAQ: ENPH) fell 3.6%. Is now the time to buy Enphase? Access our full analysis report here, it’s free.
- Construction and Maintenance Services company WillScot Mobile Mini (NASDAQ: WSC) fell 3.4%. Is now the time to buy WillScot Mobile Mini? Access our full analysis report here, it’s free.
- Renewable Energy company EVgo (NASDAQ: EVGO) fell 3.5%. Is now the time to buy EVgo? Access our full analysis report here, it’s free.
- Heavy Transportation Equipment company Douglas Dynamics (NYSE: PLOW) fell 3.6%. Is now the time to buy Douglas Dynamics? Access our full analysis report here, it’s free.
Zooming In On Enphase (ENPH)
Enphase’s shares are extremely volatile and have had 46 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 previous big move we wrote about was 11 days ago when the stock gained 3.5% on the news that the U.S. Supreme Court struck down tariffs imposed by the Trump administration, a move expected to lower costs for manufacturers. In a 6-3 decision, the court ruled that the administration's use of the International Emergency Economic Powers Act of 1977 to justify the tariffs was not applicable. The removal of these tariffs is expected to reduce the cost of imported parts, materials, and equipment, which are crucial inputs for many U.S.-based manufacturing companies. Economists suggest this will alleviate budget pressures on these firms and could also reduce broader inflation concerns, potentially paving the way for accelerated interest rate cuts by the central bank. The ruling is seen as particularly beneficial for small and medium-sized businesses, which have shouldered much of the financial burden from the import duties.
Enphase is up 28.2% since the beginning of the year, but at $43.27 per share, it is still trading 32.2% below its 52-week high of $63.80 from March 2025. Investors who bought $1,000 worth of Enphase’s shares 5 years ago would now be looking at an investment worth $268.55.
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