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:
- Engineered Components and Systems company Arrow Electronics (NYSE: ARW) fell 2.8%. Is now the time to buy Arrow Electronics? Access our full analysis report here, it’s free.
- Industrial Packaging company Crown Holdings (NYSE: CCK) fell 2.7%. Is now the time to buy Crown Holdings? Access our full analysis report here, it’s free.
- Industrial Packaging company Silgan Holdings (NYSE: SLGN) fell 2.6%. Is now the time to buy Silgan Holdings? Access our full analysis report here, it’s free.
- Home Builders company LGI Homes (NASDAQ: LGIH) fell 2.6%. Is now the time to buy LGI Homes? Access our full analysis report here, it’s free.
- Defense Contractors company RTX (NYSE: RTX) fell 2.8%. Is now the time to buy RTX? Access our full analysis report here, it’s free.
Zooming In On RTX (RTX)
RTX’s shares are not very volatile and have only had 5 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 about 24 hours ago when the stock gained 4.5% on the news that geopolitical tensions spurred a rally across the defense sector. The heightened investor interest in defense stocks followed military actions involving the US, Israel, and Iran, which raised fears of a larger regional conflict. In times of geopolitical uncertainty, investors often anticipate increased military spending and stronger demand for defense equipment, components, and related technology. This expectation of heightened demand for military hardware appeared to drive the upward price movement for companies in the sector.
RTX is up 10.1% since the beginning of the year, and at $206.11 per share, it is trading close to its 52-week high of $212.16 from March 2026. Investors who bought $1,000 worth of RTX’s shares 5 years ago would now be looking at an investment worth $2,746.
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