What Happened?
A number of stocks jumped in the afternoon session after the broader market rebounded from a tech-driven sell-off, with investors taking the opportunity to buy stocks at lower prices.
This rally was fueled by a recovery in technology stocks and a significant bounce in Bitcoin, which stabilized after losing over half its value from its October peak. Investor sentiment was also lifted by a surprising improvement in U.S. consumer sentiment and the realization that massive AI-related capital expenditure, such as Amazon's planned $200 billion, directly benefits chipmakers like Nvidia and Broadcom. These "pick-and-shovel" winners jumped as much as 7%, helping the S&P 500 edge back into positive territory for 2026. The highlight of the day was the Dow Jones Industrial Average, which surged and crossed the historic 50,000 threshold for the first time.
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 Albany (NYSE:AIN) jumped 3.3%. Is now the time to buy Albany? Access our full analysis report here, it’s free.
- Defense Contractors company Mercury Systems (NASDAQ:MRCY) jumped 3.2%. Is now the time to buy Mercury Systems? Access our full analysis report here, it’s free.
- Electrical Systems company Methode Electronics (NYSE:MEI) jumped 3.2%. Is now the time to buy Methode Electronics? Access our full analysis report here, it’s free.
- Water Infrastructure company Watts Water Technologies (NYSE:WTS) jumped 3.2%. Is now the time to buy Watts Water Technologies? Access our full analysis report here, it’s free.
- Commercial Building Products company Johnson Controls (NYSE:JCI) jumped 3.5%. Is now the time to buy Johnson Controls? Access our full analysis report here, it’s free.
Zooming In On Johnson Controls (JCI)
Johnson Controls’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 biggest move we wrote about over the last year was 3 months ago when the stock gained 7.4% on the news that the company reported third-quarter results that beat analyst expectations and provided an encouraging earnings forecast for fiscal year 2026. The building solutions provider posted third-quarter adjusted earnings of $1.26 per share on revenue of $6.44 billion, with both figures topping estimates. While the results were positive, the company's guidance for the upcoming fourth quarter was weaker than expected, projecting revenue of $5.59 billion, which fell short of analyst forecasts. However, investors focused on the longer-term outlook. Johnson Controls initiated its fiscal 2026 guidance with projected adjusted earnings of approximately $4.55 per share, which was above Wall Street's predictions. This strong full-year forecast appeared to outweigh near-term revenue concerns, signaling confidence in future profitability.
Johnson Controls is up 13.3% since the beginning of the year, and at $138.54 per share, has set a new 52-week high. Investors who bought $1,000 worth of Johnson Controls’s shares 5 years ago would now be looking at an investment worth $2,679.
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