What Happened?

A number of stocks jumped in the afternoon session after markets rotated out of tech names to position themselves for a massive injection of government spending. 

The sector was ignited by President Trump's call for a $1.5 trillion defense budget for 2027, a significant increase that sent defense contractors surging. Northrop Grumman jumped over 10% and Lockheed Martin gained nearly 8%, acting as the primary engine for the sector's outperformance. Beyond the immediate defense rally, the industrial sector benefited from a broader stabilization in energy costs, with crude prices rebounding. This combination of policy-driven demand and stabilizing input costs made heavy industry an attractive destination.

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:

• Engineered Components and Systems company Graham Corporation (NYSE: GHM) jumped 4%. Is now the time to buy Graham Corporation? Access our full analysis report here, it’s free.
• Professional Tools and Equipment company Hyster-Yale Materials Handling (NYSE: HY) jumped 4.9%. Is now the time to buy Hyster-Yale Materials Handling? Access our full analysis report here, it’s free.
• Professional Tools and Equipment company Hillman (NASDAQ: HLMN) jumped 4.9%. Is now the time to buy Hillman? Access our full analysis report here, it’s free.
• Engineered Components and Systems company Regal Rexnord (NYSE: RRX) jumped 3.5%. Is now the time to buy Regal Rexnord? Access our full analysis report here, it’s free.
• Professional Tools and Equipment company ESAB (NYSE: ESAB) jumped 4.3%. Is now the time to buy ESAB? Access our full analysis report here, it’s free.

Zooming In On Hyster-Yale Materials Handling (HY)

Hyster-Yale Materials Handling’s shares are somewhat volatile and have had 14 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 10 days ago when the stock dropped 3.1% on the news that major indices pulled back from record highs reached the previous week. The S&P 500 and Nasdaq were under pressure as the dominant artificial intelligence trade cooled off. Notable names like Nvidia were down as traders locked in profits following a banner year where the Nasdaq surged over 20%. With the S&P 500 recently hitting intraday highs near 6,945, this dip reflected a shift in internal momentum rather than a response to major economic news.

Hyster-Yale Materials Handling is up 8.5% since the beginning of the year, but at $32.64 per share, it is still trading 40.4% below its 52-week high of $54.76 from January 2025. Investors who bought $1,000 worth of Hyster-Yale Materials Handling’s shares 5 years ago would now be looking at an investment worth $494.70.

While Wall Street chases Nvidia at all-time highs, an under-the-radar semiconductor supplier is dominating a critical AI component these giants can’t build without. Click here to access our full research report, it’s free.