What Happened?
Shares of electrical energy control systems manufacturer Powell (NYSE: POWL) fell 1.3% in the afternoon session as investors reacted to rising Treasury yields and uncertainty surrounding U.S. tariffs.
Major indices like the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all tumbled as the market entered what is historically its most challenging month. The negative sentiment was fueled by a federal appeals court ruling that declared certain U.S. tariffs unconstitutional, injecting fresh uncertainty into supply chains and corporate earnings, although the tariffs remain in place for now.
Additionally, rising Treasury yields created tighter financial conditions, particularly impacting growth-oriented stocks. Investors are also cautiously awaiting this week's key labor market reports, which will heavily influence the Federal Reserve's upcoming decision on interest rates.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Powell? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Powell’s shares are extremely volatile and have had 45 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 7 days ago when the stock gained 5.9% on the news that it received a positive mention from CNBC's Jim Cramer. On his “Mad Money Lightning Round” segment, Cramer recommended the stock as a "buy," likely boosting investor confidence in the company. The endorsement follows recent positive news from the company itself. On August 20, Powell Industries announced a $12.4 million investment to expand its production capacity, a move that signals the company is preparing for future growth and increased demand for its products.
Powell is up 15% since the beginning of the year, but at $262.99 per share, it is still trading 25.4% below its 52-week high of $352.37 from November 2024. Investors who bought $1,000 worth of Powell’s shares 5 years ago would now be looking at an investment worth $9,581.
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