What Happened?
A number of stocks fell in the afternoon session after long-dated Treasury yields pushed to fresh highs, with the 30-year nearing 5.18% and the 10-year hovering around 4.6%.
The Industrial Select Sector SPDR ETF (XLI) was down about 1.25% to $168.62, with airlines, machinery and transports leading the losses. United Airlines slid more than 3% as oil held above $107 a barrel. Industrials are unusually sensitive to this mix: higher borrowing costs lift the price of financing factories, fleets and aircraft, while sticky energy prices eat directly into operating margins.
The bigger picture for retail investors is that the Iran conflict, heading into its third month with the Strait of Hormuz still blockaded, would keep inflation expectations stubbornly high. That makes Fed rate cuts less likely and pressures cyclicals that lean on healthy capex, transport demand and a global manufacturing cycle already softening across the US, EU and Japan.
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:
- Engineering and Design Services company Sterling (NASDAQ: STRL) fell 6.4%. Is now the time to buy Sterling? Access our full analysis report here, it’s free.
- Energy Products and Services company Ameresco (NYSE: AMRC) fell 5.6%. Is now the time to buy Ameresco? Access our full analysis report here, it’s free.
- Renewable Energy company Enphase (NASDAQ: ENPH) fell 5.9%. Is now the time to buy Enphase? Access our full analysis report here, it’s free.
Zooming In On Sterling (STRL)
Sterling’s shares are extremely volatile and have had 49 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 5 days ago when the stock gained 3.3% as the Dow Jones Industrial Average retook the 50,000 level, driven by 'remarkably strong' corporate fundamentals and a breakthrough in U.S.-China relations.
President Trump and President Xi agreed in Beijing to ensure the Strait of Hormuz remains open, a critical win for global manufacturing supply chains choked by Middle East conflict. Also, April retail sales rose 0.5%, matching estimates and signaling that demand for industrial-produced goods remains stable.
Industrial companies build the machinery and infrastructure that power the global economy. While the 1.9% jump in import prices reported confirmed that manufacturing inputs were still more expensive, the reduction in geopolitical risk and the easing of the 10-year yield to 4.46% lowered the cost of the long-term debt used to finance these massive industrial projects.
Sterling is up 130% since the beginning of the year, but at $733.51 per share, it is still trading 17.5% below its 52-week high of $889.03 from May 2026. Investors who bought $1,000 worth of Sterling’s shares 5 years ago would now be looking at an investment worth $33,086.
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