What Happened?
A number of stocks jumped in the afternoon session after oil prices fell sharply following reports of de-escalating tensions between the U.S. and Iran.
The positive market sentiment came after President Trump announced that the U.S. has had "very good and productive conversations" with Iran, sparking hopes for an end to the conflict. This news sent the price for a barrel of Brent crude, a key international benchmark, plunging. Companies with significant fuel expenses, such as airlines and cruise operators, were among the day's biggest winners. Fuel is one of the largest operating costs for these industries, so a sustained drop in oil prices can significantly improve their profit margins. Illustrating the trend, shares of American Airlines and United Airlines climbed around 4.9% and 4.5% respectively, while Norwegian Cruise Line Holdings surged 7.9%.
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:
- Traditional Media & Publishing company IMAX (NYSE: IMAX) jumped 3.6%. Is now the time to buy IMAX? Access our full analysis report here, it’s free.
- Insurance Brokers company Baldwin Insurance Group (NASDAQ: BWIN) jumped 3.6%. Is now the time to buy Baldwin Insurance Group? Access our full analysis report here, it’s free.
- Enterprise Networking company Applied Digital (NASDAQ: APLD) jumped 3.8%. Is now the time to buy Applied Digital? Access our full analysis report here, it’s free.
- Business Process Outsourcing & Consulting company Aramark (NYSE: ARMK) jumped 3.6%. Is now the time to buy Aramark? Access our full analysis report here, it’s free.
- Professional Staffing & HR Solutions company First Advantage (NASDAQ: FA) jumped 3.8%. Is now the time to buy First Advantage? Access our full analysis report here, it’s free.
Zooming In On Applied Digital (APLD)
Applied Digital’s shares are extremely volatile and have had 91 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 20 days ago when the stock dropped 6% on the news that the escalating conflict with Iran threatened to disrupt global oil supplies and fuel inflation.
U.S. stocks fell as crude oil prices rose for the second consecutive day, with the international benchmark, Brent crude, jumping as much as 13% to over $82 a barrel. The surge came as shipments through the Strait of Hormuz, a critical channel for about 20% of the world's oil, were choked off. Analysts were concerned that a prolonged conflict could lead to an inflationary shock. The injection of new uncertainty into the business environment is a hit to confidence, which could lead companies to invest and hire less, potentially derailing an already fragile economy.
Applied Digital is down 5.1% since the beginning of the year, and at $26.68 per share, it is trading 35.5% below its 52-week high of $41.35 from January 2026. Despite the year-to-date decline, investors who bought $1,000 worth of Applied Digital’s shares 5 years ago would now be looking at an investment worth $29,453.
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