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:
- General Industrial Machinery company John Bean (NYSE: JBTM) jumped 3.2%. Is now the time to buy John Bean? Access our full analysis report here, it’s free for active Edge members.
- Specialty Equipment Distributors company Karat Packaging (NASDAQ: KRT) jumped 3.9%. Is now the time to buy Karat Packaging? Access our full analysis report here, it’s free for active Edge members.
- Internet of Things company SmartRent (NYSE: SMRT) jumped 3.2%. Is now the time to buy SmartRent? Access our full analysis report here, it’s free for active Edge members.
- Internet of Things company Emerson Electric (NYSE: EMR) jumped 2.7%. Is now the time to buy Emerson Electric? Access our full analysis report here, it’s free for active Edge members.
- Home Construction Materials company JELD-WEN (NYSE: JELD) jumped 3.4%. Is now the time to buy JELD-WEN? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Karat Packaging (KRT)
Karat Packaging’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be 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 7.2% on the news that BofA Securities upgraded the stock's rating to Buy from Neutral. An upgrade from a major financial institution like BofA Securities often signaled to investors a belief that the company's future prospects were improving. This kind of positive reassessment could lead to increased buying activity as investors acted on the new recommendation. The change in rating from "Neutral" to "Buy" represented a significant boost in confidence from the analyst firm.
Karat Packaging is down 19.9% since the beginning of the year, and at $23.89 per share, it is trading 28.6% below its 52-week high of $33.46 from February 2025. Investors who bought $1,000 worth of Karat Packaging’s shares at the IPO in April 2021 would now be looking at an investment worth $1,287.
Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.
