What Happened?

A number of stocks jumped in the afternoon session after markets rotated out of tech names to position themselves for a massive injection of government spending. 

The sector was ignited by President Trump's call for a $1.5 trillion defense budget for 2027, a significant increase that sent defense contractors surging. Northrop Grumman jumped over 10% and Lockheed Martin gained nearly 8%, acting as the primary engine for the sector's outperformance. Beyond the immediate defense rally, the industrial sector benefited from a broader stabilization in energy costs, with crude prices rebounding. This combination of policy-driven demand and stabilizing input costs made heavy industry an attractive destination.

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 Worthington (NYSE: WOR) jumped 3.7%. Is now the time to buy Worthington? Access our full analysis report here, it’s free.
• Gas and Liquid Handling company Helios (NYSE: HLIO) jumped 3.5%. Is now the time to buy Helios? Access our full analysis report here, it’s free.
• Gas and Liquid Handling company Ingersoll Rand (NYSE: IR) jumped 3.8%. Is now the time to buy Ingersoll Rand? Access our full analysis report here, it’s free.
• Engineered Components and Systems company Gates Industrial Corporation (NYSE: GTES) jumped 3.4%. Is now the time to buy Gates Industrial Corporation? Access our full analysis report here, it’s free.
• Professional Tools and Equipment company Kennametal (NYSE: KMT) jumped 2.9%. Is now the time to buy Kennametal? Access our full analysis report here, it’s free.

Zooming In On Ingersoll Rand (IR)

Ingersoll Rand’s shares are not very volatile and have only had 7 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 biggest move we wrote about over the last year was 11 months ago when the stock dropped 5.8% on the news that the company reported weak fourth-quarter results. Its organic revenue slightly missed and its revenue was in line with Wall Street's estimates. Looking ahead, guidance largely came in below expectations. Overall, this was a softer quarter.

Ingersoll Rand is up 5.8% since the beginning of the year, but at $84.38 per share, it is still trading 10.5% below its 52-week high of $94.23 from January 2025. Investors who bought $1,000 worth of Ingersoll Rand’s shares 5 years ago would now be looking at an investment worth $1,818.

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