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:

• Construction and Maintenance Services company Tutor Perini (NYSE: TPC) jumped 3.6%. Is now the time to buy Tutor Perini? Access our full analysis report here, it’s free for active Edge members.
• Defense Contractors company KBR (NYSE: KBR) jumped 3.7%. Is now the time to buy KBR? Access our full analysis report here, it’s free for active Edge members.
• Engineering and Design Services company AECOM (NYSE: ACM) jumped 2.6%. Is now the time to buy AECOM? Access our full analysis report here, it’s free for active Edge members.
• Aerospace company AAR (NYSE: AIR) jumped 3.3%. Is now the time to buy AAR? Access our full analysis report here, it’s free for active Edge members.
• Specialty Equipment Distributors company Herc (NYSE: HRI) jumped 2.6%. Is now the time to buy Herc? Access our full analysis report here, it’s free for active Edge members.

Zooming In On KBR (KBR)

KBR’s shares are not very volatile and have only had 8 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 18 days ago when the stock dropped 5.5% on the news that the company announced a strategic plan to spin off its Mission Technology Solutions (MTS) business, a move that will create two separate, publicly traded companies. 

The board unanimously approved the tax-free transaction, which is expected to be finalized by mid-to-late 2026. The plan will divide the company into “New KBR,” which will focus on sustainable technology, and a new entity called “SpinCo,” which will handle government services related to national security and space. The company stated the goal was to give each business better strategic focus and operational freedom. This major restructuring announcement came as KBR also faced a securities class-action lawsuit. The lawsuit alleged that the company made misleading statements and failed to disclose that the U.S. Department of Defense's Transportation Command had concerns about a key contract.

KBR is down 23.8% since the beginning of the year, and at $44.11 per share, it is trading 38.8% below its 52-week high of $72.02 from November 2024. Investors who bought $1,000 worth of KBR’s shares 5 years ago would now be looking at an investment worth $1,789.

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