What Happened?
A number of stocks jumped in the morning session after the broad market rallied and bond yields fell as the Trump administration announced a new peace deal that would lead to the reopening of the Strait of Hormuz.
Here is what it means for asset management companies. Advisory fee income is calculated as a percentage of assets under management. When the Nasdaq gained more than 2.5% and the S&P 500 climbed more than 1.5%, AUM bases grow automatically and next quarter's fee income moves up with them. When bond yields fall, fixed income portfolios appreciate and add to AUM across multi-asset mandates. The longer-term catalyst is in client behavior. Investors holding elevated cash positions while geopolitical uncertainty persisted tend to deploy that capital when headline risks resolve. Inflows, not just market appreciation, drive durable earnings growth for asset managers.
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:
- Asset Management company TPG (NASDAQ: TPG) jumped 2.7%. Is now the time to buy TPG? Access our full analysis report here, it’s free.
- Asset Management company Ares (NYSE: ARES) jumped 2.9%. Is now the time to buy Ares? Access our full analysis report here, it’s free.
- Asset Management company Blackstone (NYSE: BX) jumped 3.6%. Is now the time to buy Blackstone? Access our full analysis report here, it’s free.
Zooming In On Blackstone (BX)
Blackstone’s shares are somewhat volatile and have had 10 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 2.9% on the news that the May jobs report drove Treasury yields to levels that directly challenge the sector's business model.
The 10-year yield rose above 4.5% and the 30-year climbed above 5%, thresholds that increase mark-to-market pressure on bond portfolios at asset managers and raise the hurdle rate for new private credit and infrastructure fund deployment.
For firms like Blackstone, KKR, and Ares, a 30-year above 5% complicates the economics of long-duration deals, reduces the relative appeal of illiquid alternatives versus risk-free income, and slows deployment pipelines. CME FedWatch's shift toward pricing rate hike risk by year end also challenged the recovery in M&A and IPO activity that had been supporting advisory and underwriting fee revenue. The SpaceX IPO, at a $1.77 trillion valuation, was a bright spot, but one transaction cannot offset sector-wide rate repricing.
Blackstone is down 20.1% since the beginning of the year, and at $126.91 per share, it is trading 32.7% below its 52-week high of $188.68 from September 2025. Despite the year-to-date decline, investors who bought $1,000 worth of Blackstone’s shares 5 years ago would now be looking at an investment worth $1,304.
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