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:
- Digital Media & Content Platforms company Stride (NYSE: LRN) jumped 2.8%. Is now the time to buy Stride? Access our full analysis report here, it’s free.
- Electronic Components & Manufacturing company Jabil (NYSE: JBL) jumped 2.5%. Is now the time to buy Jabil? Access our full analysis report here, it’s free.
- Electronic Components & Manufacturing company Benchmark (NYSE: BHE) jumped 4%. Is now the time to buy Benchmark? Access our full analysis report here, it’s free.
- Electronic Components & Manufacturing company Knowles (NYSE: KN) jumped 3.5%. Is now the time to buy Knowles? Access our full analysis report here, it’s free.
- IT Distribution & Solutions company Connection (NASDAQ: CNXN) jumped 3%. Is now the time to buy Connection? Access our full analysis report here, it’s free.
Zooming In On Benchmark (BHE)
Benchmark’s shares are not very volatile and have only had 9 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 9 months ago when the stock dropped 14.7% on the news that the company reported weak first quarter 2025 results: its revenue missed and its revenue and EPS guidance for the next quarter fell slightly short of Wall Street's estimates. Sales declined 6% year over year, driven by broad-based weakness across key sectors like Medical, Industrial, and Advanced Computing, with only the Aerospace and Semiconductor units posting growth. On the other hand, Benchmark beat analysts' EPS expectations this quarter. Still, this was a weaker quarter.
Benchmark is up 16.3% since the beginning of the year, and at $51.05 per share, has set a new 52-week high. Investors who bought $1,000 worth of Benchmark’s shares 5 years ago would now be looking at an investment worth $1,896.
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