What Happened?

A number of stocks fell in the afternoon session after the Dow Jones Industrial Average fell as much as 0.7%, reflecting lingering uncertainty, and capping off a volatile week which saw stocks enjoy some relief as President Donald Trump reduced tensions with European allies by backing off his threat of imposing new tariffs. 

Threats of tariffs initially created uncertainty for businesses, as they can lead to higher costs for multinational corporations and disrupt global supply chains. By withdrawing the threat, the administration removed a significant headwind for the market, prompting a relief rally. This development was a key factor in helping major indexes recover from earlier losses, even as some analysts noted that underlying geopolitical risks and market volatility remain concerns for investors.

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:

• Custom Parts Manufacturing company Stratasys (NASDAQ: SSYS) fell 3.7%. Is now the time to buy Stratasys? Access our full analysis report here, it’s free.
• Custom Parts Manufacturing company Proto Labs (NYSE: PRLB) fell 3%. Is now the time to buy Proto Labs? Access our full analysis report here, it’s free.
• Electrical Systems company Methode Electronics (NYSE: MEI) fell 4%. Is now the time to buy Methode Electronics? Access our full analysis report here, it’s free.
• Specialty Equipment Distributors company United Rentals (NYSE: URI) fell 3.8%. Is now the time to buy United Rentals? Access our full analysis report here, it’s free.
• Electrical Systems company Powell (NASDAQ: POWL) fell 3.6%. Is now the time to buy Powell? Access our full analysis report here, it’s free.

Zooming In On Methode Electronics (MEI)

Methode Electronics’s shares are extremely volatile and have had 32 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 biggest move we wrote about over the last year was 11 months ago when the stock dropped 28.4% on the news that the company reported weak third-quarter (fiscal 2025) results: revenue, EPS, and EBITDA all missed Wall Street's estimates, and next quarter's revenue guidance came in below expectations. 

The key highlight for the quarter was the ongoing weakness in the automotive segment, where sales dropped over 17% due to the phase-out of older EV lighting programs, combined with a broader slowdown in new EV model launches. This decline more than offset growth in the industrial segment, where power products for data centers saw strong demand. 

Looking ahead, revenue guidance for the fourth quarter suggests flat to modest growth. Overall, this was a tough quarter, weighed down by auto-sector struggles.

Methode Electronics is up 8.5% since the beginning of the year, but at $7.27 per share, it is still trading 44.8% below its 52-week high of $13.17 from January 2025. Investors who bought $1,000 worth of Methode Electronics’s shares 5 years ago would now be looking at an investment worth $176.36.

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