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:
- IT Distribution & Solutions company Connection (NASDAQ: CNXN) jumped 4.3%. Is now the time to buy Connection? Access our full analysis report here, it’s free.
- Advertising & Marketing Services company Ibotta (NYSE: IBTA) jumped 4.2%. Is now the time to buy Ibotta? Access our full analysis report here, it’s free.
- Asset Management & Auction Services company OPENLANE (NYSE: OPLN) jumped 4.2%. Is now the time to buy OPENLANE? Access our full analysis report here, it’s free.
- IT Distribution & Solutions company ScanSource (NASDAQ: SCSC) jumped 3.3%. Is now the time to buy ScanSource? Access our full analysis report here, it’s free.
- Asset Management & Auction Services company RB Global (NYSE: RBA) jumped 3.3%. Is now the time to buy RB Global? Access our full analysis report here, it’s free.
Zooming In On Connection (CNXN)
Connection’s shares are not very volatile and have only had 2 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 about 2 months ago when the stock gained 10.4% on the news that the company reported decent fourth-quarter results that saw profits surpass Wall Street's expectations even as revenue came in light. The company posted adjusted earnings of $0.91 per share, beating analyst forecasts by 5.8%. This strong profitability was also reflected in its adjusted EBITDA, which came in 11.5% above consensus. However, revenue for the quarter was $702.9 million, missing estimates by 4.4% and representing a slight 0.8% decline from the same period last year. Despite the revenue shortfall, investors appeared to focus on the better-than-expected earnings, signaling confidence in the company's ability to manage costs and maintain profitability.
Connection is up 2.7% since the beginning of the year, but at $58.44 per share, it is still trading 17.3% below its 52-week high of $70.64 from May 2025. Investors who bought $1,000 worth of Connection’s shares 5 years ago would now be looking at an investment worth $1,294.
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