What Happened?
A number of stocks jumped in the afternoon session after Oil prices fell sharply, a direct and immediate input cost relief for manufacturers, as President Trump paused the Strait of Hormuz military escort and cited progress on a U.S.–Iran peace deal.
The underlying demand backdrop was also solid: the ISM Manufacturing PMI (Purchasing Managers' Index) held at 52.7% in April, the fourth straight month of expansion. The ISM Purchasing Managers' Index (PMI) measures whether manufacturing activity is expanding or contracting: a reading above 50 means growth. The ISM prices component, separate from the headline PMI, measures what manufacturers are paying for inputs. At 84.6% in April, it was near its highest level in years, meaning manufacturers were under intense cost pressure. A fall in oil directly reduces one of the three key inputs driving that reading.
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:
- Ground Transportation company XPO (NYSE: XPO) jumped 2.8%. Is now the time to buy XPO? Access our full analysis report here, it’s free.
- Home Construction Materials company Griffon (NYSE: GFF) jumped 2.8%. Is now the time to buy Griffon? Access our full analysis report here, it’s free.
- Automobile Manufacturing company Goodyear (NASDAQ: GT) jumped 2.8%. Is now the time to buy Goodyear? Access our full analysis report here, it’s free.
Zooming In On XPO (XPO)
XPO’s shares are quite volatile and have had 19 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 2 days ago when the stock dropped 7% on the news that WTI crude jumped 3% to above $105 per barrel and Brent surged 5% to over $114, following the UAE's interception of Iranian missiles and renewed concerns about the Strait of Hormuz.
Fuel is the single largest variable cost line for trucking, rail, and parcel operators, and the sharp move higher immediately compresses operating margins unless carriers can pass through fuel surcharges quickly which is harder in a softening freight environment. Furthermore, with jet fuel reportedly trading near $4.56 per gallon, nearly double pre-war levels, and analysts warning of potential rationing in Asia and Europe, the entire global logistics chain faced both a cost shock and a routing problem.
XPO is up 52.7% since the beginning of the year, and at $212.00 per share, it is trading close to its 52-week high of $228.37 from April 2026. Investors who bought $1,000 worth of XPO’s shares 5 years ago would now be looking at an investment worth $1,469.
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