What Happened?
A number of stocks jumped in the afternoon session after President Trump cooled fears of a transatlantic trade war by calling off scheduled tariffs on European allies.
The rally followed a productive meeting in Davos with NATO Secretary General Mark Rutte, where a "framework of a future deal" regarding Greenland and the Arctic region was established. By explicitly ruling out the use of military force and suspending the 10% tariffs previously set for February 1st, the administration provided the "sigh of relief" the market desperately needed after Tuesday's sharp sell-off. Technology and semiconductor leaders like Nvidia and AMD spearheaded the recovery as investors quickly pivoted back into growth stocks. The "Sell America" trade from the prior session reversed sharply, with the Nasdaq Composite jumping 1.5% and the S&P 500 erasing its 2026 losses. This rebound was further supported by a stabilization in the bond market; as tariff-related inflation fears subsided, the 10-year Treasury yield retreated from its recent highs, creating a more favorable backdrop for equity valuations across the board.
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:
- Office & Commercial Furniture company MillerKnoll (NASDAQ: MLKN) jumped 3.3%. Is now the time to buy MillerKnoll? Access our full analysis report here, it’s free.
- Hardware & Infrastructure company Super Micro (NASDAQ: SMCI) jumped 3.6%. Is now the time to buy Super Micro? Access our full analysis report here, it’s free.
- Terrestrial Telecommunication Services company Cogent (NASDAQ: CCOI) jumped 3.3%. Is now the time to buy Cogent? Access our full analysis report here, it’s free.
- IT Distribution & Solutions company Avnet (NASDAQ: AVT) jumped 3.5%. Is now the time to buy Avnet? Access our full analysis report here, it’s free.
- Specialized Technology company Cognex (NASDAQ: CGNX) jumped 3.7%. Is now the time to buy Cognex? Access our full analysis report here, it’s free.
Zooming In On Cognex (CGNX)
Cognex’s shares are somewhat volatile and have had 13 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 biggest move we wrote about over the last year was 6 months ago when the stock gained 21.5% on the news that the company reported second-quarter financial results that beat Wall Street estimates and provided strong guidance for the upcoming quarter.
The industrial machine vision specialist posted second-quarter adjusted earnings of $0.25 per share on revenue of $249 million, surpassing analyst expectations. The revenue figure marked a 4% increase from the year-ago period, propelled by growth in its logistics business and stronger trends in factory automation. Adding to the positive sentiment, Cognex provided an upbeat forecast for the third quarter, with expected revenue between $245 million and $265 million, which came in ahead of Wall Street's consensus estimate.
Cognex is up 9.4% since the beginning of the year, but at $40.41 per share, it is still trading 16.4% below its 52-week high of $48.35 from October 2025. Investors who bought $1,000 worth of Cognex’s shares 5 years ago would now be looking at an investment worth $474.35.
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