What Happened?
A number of stocks fell in the afternoon session after the broader U.S. stock market declined amid investor caution and a pullback in technology stocks.
The main story? Investors are cashing in on a good run and feeling a bit cautious. After a fantastic run, many of those high-flying AI and technology stocks saw investors take profits: selling shares to lock in their gains. This is often called a "market rotation." Money is moving out of the red-hot tech sector (which some worry has become too expensive) and into other parts of the market that investors may currently deem more stable or reasonably-priced.
There's a secondary reason for the cautious mood: The long government shutdown came to an end. Though it's typically interpreted as good news, it also means a flood of delayed economic reports will be released. For weeks, investors were "flying blind" without key updates on the economy's health, like inflation data and the jobs report. In typical "sell the news" fashion, investors may also be taking profits and selling in anticipation that the new data would potentially give the Federal Reserve reasons to slow or even pause future rate cuts.
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:
- Construction and Maintenance Services company Comfort Systems (NYSE: FIX) fell 7.6%. Is now the time to buy Comfort Systems? Access our full analysis report here, it’s free for active Edge members.
- Electrical Systems company Powell (NASDAQ: POWL) fell 8.2%. Is now the time to buy Powell? Access our full analysis report here, it’s free for active Edge members.
- Construction and Maintenance Services company WillScot Mobile Mini (NASDAQ: WSC) fell 5.2%. Is now the time to buy WillScot Mobile Mini? Access our full analysis report here, it’s free for active Edge members.
- Engineering and Design Services company Sterling (NASDAQ: STRL) fell 13.7%. Is now the time to buy Sterling? Access our full analysis report here, it’s free for active Edge members.
- Electrical Systems company Vertiv (NYSE: VRT) fell 6.8%. Is now the time to buy Vertiv? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Sterling (STRL)
Sterling’s shares are extremely volatile and have had 42 moves greater than 5% over the last year. But moves this big are rare even for Sterling and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 1 day ago when the stock gained 0.9% on the news that its Board of Directors authorized a new $400 million stock repurchase program. The new program, set to run over 24 months, replaced a previous plan that had $81 million in remaining capacity. Stock buybacks can signal that a company's leadership believes its own shares are a good investment, which often boosts investor confidence. Sterling's CEO, Joe Cutillo, stated that the move reflected the company's "continued confidence in Sterling's outlook," pointing to its strong balance sheet and cash flow. This financial health was highlighted in the company's recent third-quarter results, where both earnings and revenues grew significantly and beat expectations. The company also reported a record backlog of $2.6 billion, suggesting solid demand for its services.
Sterling is up 95.6% since the beginning of the year, but at $328 per share, it is still trading 20.2% below its 52-week high of $411.07 from November 2025. Investors who bought $1,000 worth of Sterling’s shares 5 years ago would now be looking at an investment worth $21,396.
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