What Happened?
A number of stocks jumped in the afternoon session after oil prices fell on hopes of a US-Iran peace deal.
The conflict pushed gasoline above $4 a gallon at its peak, the highest since late 2023, effectively taxing consumer budgets at the worst possible time for discretionary spending. Falling oil prices ease that tax, with the most immediate benefit landing on airlines, whose jet fuel costs are their largest operating line. The Russell 2000 gained more than 1%, outpacing the other indices because smaller, domestically-focused consumer businesses are most sensitive to changes in household energy costs and real incomes. Both Brent and WTI remained well above pre-war levels near $70, so the relief was partial, but the direction changed, and that was what the market traded.
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:
- Consumer Discretionary - Apparel and Accessories company Carter's (NYSE: CRI) jumped 3.8%. Is now the time to buy Carter's? Access our full analysis report here, it’s free.
- Consumer Discretionary - Casino Operator company MGM Resorts (NYSE: MGM) jumped 3.9%. Is now the time to buy MGM Resorts? Access our full analysis report here, it’s free.
- Consumer Discretionary - Leisure Products company Malibu Boats (NASDAQ: MBUU) jumped 2.6%. Is now the time to buy Malibu Boats? Access our full analysis report here, it’s free.
Zooming In On MGM Resorts (MGM)
MGM Resorts’s shares are somewhat volatile and have had 13 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 11 days ago when the stock gained 16.4% on the news that People Incorporated submitted a non-binding proposal to acquire all outstanding shares of the company it does not already own for $48.30 per share in cash.
People Inc., formerly known as IAC, already owns 26.1% of MGM and is seeking to purchase the remaining 73.9% to take the casino operator private. The offer, which values the company at over $18 billion, represents a premium of 10.6% to MGM's most recent closing price and a 24.1% premium to the 30-day volume-weighted average price. The significant premium over recent trading levels drove the stock's sharp increase. Following the news, Susquehanna raised its price target on MGM stock from $45.00 to $50.00 and maintained a positive rating.
MGM Resorts is up 34.8% since the beginning of the year, and at $49.20 per share, it is trading close to its 52-week high of $50.69 from May 2026. Investors who bought $1,000 worth of MGM Resorts’s shares 5 years ago would now be looking at an investment worth $1,165.
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