What Happened?
A number of stocks jumped in the afternoon session after a softened tone from President Donald Trump on U.S.-China relations boosted investor sentiment. The positive shift followed a weekend post on Truth Social where Trump stated, "Don't worry about China, it will all be fine!" and expressed a desire to help rather than hurt the country's economy. This statement provided significant relief to markets that had ended the prior week with steep losses. In response, the Nasdaq Composite jumped 2.2%, the S&P 500 gained 1.6%, and the Dow Jones Industrial Average closed 1.3% higher, as investors' fears of escalating trade tensions subsided.
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:
- Energy Products and Services company Ameresco (NYSE: AMRC) jumped 9.7%. Is now the time to buy Ameresco? Access our full analysis report here, it’s free for active Edge members.
- Renewable Energy company EVgo (NASDAQ: EVGO) jumped 10%. Is now the time to buy EVgo? Access our full analysis report here, it’s free for active Edge members.
- Engineering and Design Services company Sterling (NASDAQ: STRL) jumped 5.5%. Is now the time to buy Sterling? Access our full analysis report here, it’s free for active Edge members.
- Waste Management company Montrose (NYSE: MEG) jumped 5.7%. Is now the time to buy Montrose? Access our full analysis report here, it’s free for active Edge members.
- General Industrial Machinery company Hillenbrand (NYSE: HI) jumped 5.8%. Is now the time to buy Hillenbrand? Access our full analysis report here, it’s free for active Edge members.
Zooming In On EVgo (EVGO)
EVgo’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 3 days ago when the stock dropped 5.6% on the news that the U.S. threatened to impose "massive increases" to tariffs on China in response to new export controls from Beijing. The potential countermeasures follow China's decision to place new restrictions on the export of strategic minerals and related products, including rare earths, which are critical for the defense, semiconductor, and manufacturing industries. This escalation in the economic competition between the two largest global economies is fueling investor anxiety. The new tariff threats raise concerns about disruptions to global supply chains, increased material costs for manufacturers, and a potential drag on an already sluggish economy. Industrial companies are particularly sensitive to these developments as they are often cyclical and heavily reliant on international trade.
EVgo is up 14.6% since the beginning of the year, but at $4.80 per share, it is still trading 46.3% below its 52-week high of $8.94 from October 2024. Investors who bought $1,000 worth of EVgo’s shares at the IPO in November 2020 would now be looking at an investment worth $489.23.
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