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:
- Specialty Equipment Distributors company Richardson Electronics (NASDAQ: RELL) jumped 5.8%. Is now the time to buy Richardson Electronics? Access our full analysis report here, it’s free for active Edge members.
- Electronic Components company nLIGHT (NASDAQ: LASR) jumped 7.5%. Is now the time to buy nLIGHT? Access our full analysis report here, it’s free for active Edge members.
- Renewable Energy company American Superconductor (NASDAQ: AMSC) jumped 10.3%. Is now the time to buy American Superconductor? Access our full analysis report here, it’s free for active Edge members.
- Custom Parts Manufacturing company 3D Systems (NYSE: DDD) jumped 6.2%. Is now the time to buy 3D Systems? Access our full analysis report here, it’s free for active Edge members.
- Renewable Energy company EnerSys (NYSE: ENS) jumped 6.3%. Is now the time to buy EnerSys? Access our full analysis report here, it’s free for active Edge members.
Zooming In On American Superconductor (AMSC)
American Superconductor’s shares are extremely volatile and have had 68 moves greater than 5% over the last year. But moves this big are rare even for American Superconductor and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 6 days ago when the stock dropped 6.9% on the news that investors grew anxious as the U.S. government shutdown extended into its seventh day, creating widespread uncertainty. The political stalemate in Washington has tangible consequences for the economy and markets.
A key impact is the delay in the release of crucial economic data, including the September jobs report, leaving the Federal Reserve with less information to guide its policy decisions. The shutdown is also causing direct disruptions, with staffing shortages at the Federal Aviation Administration (FAA) leading to widespread delays at major airports. This combination of economic ambiguity and real-world service interruptions has dampened investor confidence across multiple sectors.
Adding to the unease, Chief Economist at Moody's Analytics, Mark Zandi, warned that 22 states are already showing clear signs of a recession, placing the broader U.S. economy in a precarious position. Also, the latest Survey of Consumer Expectations from the New York Fed revealed that households' short-term inflation expectations are rising, while their outlook on the labor market is deteriorating. Consumers expressed greater concern about potential job losses and expect lower earnings growth, factors that directly impact discretionary spending.
American Superconductor is up 142% since the beginning of the year, and at $61.85 per share, it is trading close to its 52-week high of $64.63 from September 2025. Investors who bought $1,000 worth of American Superconductor’s shares 5 years ago would now be looking at an investment worth $3,577.
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