What Happened?
A number of stocks fell in the afternoon session after U.S. equities traded lower as escalating geopolitical tensions between the U.S. and Iran pushed oil prices above $100 a barrel, rattling investor confidence.
Major indices saw significant declines, with the Dow Jones tumbling. The uncertainty surrounding the conflict drove Brent crude oil higher, effectively acting as a tax on the global economy by increasing costs for businesses and consumers. This sentiment was reflected in the University of Michigan's consumer survey, which fell to a three-month low as households braced for higher inflation, with year-ahead expectations jumping to 3.8%. Richmond Fed President Tom Barkin commented on the situation, noting that the 'fog of war' has deepened economic uncertainty and that historically, such oil price shocks are highly coincident with recessions.
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:
- Hardware & Infrastructure company IonQ (NYSE:IONQ) fell 7.6%. Is now the time to buy IonQ? Access our full analysis report here, it’s free.
- IT Services & Consulting company ASGN (NYSE:ASGN) fell 5%. Is now the time to buy ASGN? Access our full analysis report here, it’s free.
- Enterprise Networking company Applied Digital (NASDAQ:APLD) fell 8.9%. Is now the time to buy Applied Digital? Access our full analysis report here, it’s free.
- IT Services & Consulting company DXC (NYSE:DXC) fell 3.4%. Is now the time to buy DXC? Access our full analysis report here, it’s free.
- Hardware & Infrastructure company Hewlett Packard Enterprise (NYSE:HPE) fell 4.1%. Is now the time to buy Hewlett Packard Enterprise? Access our full analysis report here, it’s free.
Zooming In On Applied Digital (APLD)
Applied Digital’s shares are extremely volatile and have had 91 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 4 days ago when the stock gained 3.8% on the news that 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%.
Applied Digital is down 16.1% since the beginning of the year, and at $23.60 per share, it is trading 42.9% below its 52-week high of $41.35 from January 2026. Despite the year-to-date decline, investors who bought $1,000 worth of Applied Digital’s shares 5 years ago would now be looking at an investment worth $21,847.
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