What Happened?
A number of stocks jumped in the afternoon session after President Trump reversed course on a military escalation against Iran that wiped $1.2 trillion from the market earlier in the day.
The session opened under heavy pressure after Trump posted on Truth Social that the U.S. would attack Iran "VERY HARD TONIGHT" and threatened to seize the country's oil assets. Then, around midday, he posted again cancelling the planned strikes. His statement said discussions had been brought to "the highest level of Iranian leadership" and that final points of a peace deal had been "approved by all parties involved," citing thirteen countries including the U.S., Israel, Saudi Arabia, UAE, and Qatar. A signing date would be "announced shortly."
The market moved the moment the post landed. The S&P 500 jumped 1.4%, the Dow surged, and the Nasdaq gained 1.8%. Oil fell more than 3%. The 10-year Treasury yield eased from 4.55% to 4.47%. The read-through is simple: lower oil means lower inflation means less pressure on the Fed to hike. Iran's disruption of the Strait of Hormuz was the single largest driver of the 4.2% annual inflation print reported earlier in the week as energy alone accounted for more than 60% of May's monthly CPI increase. A ceasefire that reopens the Strait unwinds that pressure immediately, potentially taking the December rate hike that markets were fully pricing in off the table.
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:
- Footwear Retailer company Boot Barn (NYSE: BOOT) jumped 4.4%. Is now the time to buy Boot Barn? Access our full analysis report here, it’s free.
- Discount Retailer company Ollie's (NASDAQ: OLLI) jumped 4.8%. Is now the time to buy Ollie's? Access our full analysis report here, it’s free.
- Home Furniture Retailer company Williams-Sonoma (NYSE: WSM) jumped 4.6%. Is now the time to buy Williams-Sonoma? Access our full analysis report here, it’s free.
Zooming In On Ollie's (OLLI)
Ollie’s shares are somewhat volatile and have had 14 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 7 days ago when the stock dropped 6.9% on the news that an analyst downgrade and the company's slightly reduced full-year revenue forecast overshadowed its first-quarter earnings beat.
The move came after Gordon Haskett downgraded Ollie's from Buy to Accumulate and cut its price target, noting the company's sales growth appeared weak compared to off-price retail competitors. While Ollie's reported first-quarter earnings per share that were ahead of expectations, its revenue fell slightly short of estimates. The company also trimmed its full-year sales outlook, citing "ongoing pressure on the lower-income consumer" and current sales trends running below expectations. This cautious guidance prompted several analysts to lower their own forecasts, fueling investor concern despite the company raising its earnings outlook for the year.
Ollie's is down 25.7% since the beginning of the year, and at $82.73 per share, it is trading 41.2% below its 52-week high of $140.80 from August 2025. Investors who bought $1,000 worth of Ollie’s shares 5 years ago would now be looking at only $946.34.
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