What Happened?
A number of stocks fell in the afternoon session after the broader market tumbled in morning trading as geopolitical tensions in the Middle East sent crude oil prices soaring above $100 a barrel.
The unease among investors stemmed from the U.S.-Israel conflict with Iran, which intensified concerns over severe supply chain disruptions. With oil prices breaching the key psychological barrier of $100, major indices like the Dow Jones Industrial Average, S&P 500, and Nasdaq all opened significantly lower. The uncertainty weighed on the economic outlook, with Goldman Sachs cutting its growth forecast and citing a 25% chance of a recession in the next year. This risk-off sentiment reflected fears that sustained high energy prices could fuel inflation and dampen economic activity, prompting investors to pull back from equities.
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:
- Electrical Systems company Methode Electronics (NYSE: MEI) fell 8.5%. Is now the time to buy Methode Electronics? Access our full analysis report here, it’s free.
- Marine Transportation company Scorpio Tankers (NYSE: STNG) fell 4.9%. Is now the time to buy Scorpio Tankers? Access our full analysis report here, it’s free.
- Aerospace company ATI (NYSE: ATI) fell 5.6%. Is now the time to buy ATI? Access our full analysis report here, it’s free.
- Waste Management company Quest Resource (NASDAQ: QRHC) fell 5.7%. Is now the time to buy Quest Resource? Access our full analysis report here, it’s free.
Zooming In On Methode Electronics (MEI)
Methode Electronics’s shares are very volatile and have had 29 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 3 days ago when the stock dropped 7.4% on the news that oil prices surged amid escalating conflict in the Middle East. Brent crude prices soared past $110 a barrel for the first time since 2022 as the conflict threatens oil production and key shipping routes, such as the Strait of Hormuz. The disruption reportedly halted over 20 million barrels of oil per day. For the industrial sector, which includes manufacturing, transportation, and construction companies, higher oil prices translate directly into increased operational costs. Elevated fuel and energy expenses can shrink profit margins and signal a potential slowdown in economic activity, weighing heavily on investor sentiment for cyclical stocks.
Methode Electronics is down 19.4% since the beginning of the year, and at $5.40 per share, it is trading 48% below its 52-week high of $10.39 from July 2025. Investors who bought $1,000 worth of Methode Electronics’s shares 5 years ago would now be looking at an investment worth $116.94.
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