What Happened?
A number of stocks jumped in the afternoon session after WTI oil fell 4.7% and Treasury yields declined, the two macro inputs auto manufacturers care most about.
Lower oil means cheaper gas, which makes large-vehicle ownership more affordable; lower yields mean cheaper auto loans, which makes new-vehicle purchases more affordable. Both unlock pent-up demand from consumers who had been priced out.
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:
- Automobile Manufacturing company Lucid (NASDAQ: LCID) jumped 3.2%. Is now the time to buy Lucid? Access our full analysis report here, it’s free.
- Automobile Manufacturing company Goodyear (NASDAQ: GT) jumped 3.6%. Is now the time to buy Goodyear? Access our full analysis report here, it’s free.
- Automobile Manufacturing company Autoliv (NYSE: ALV) jumped 3.1%. Is now the time to buy Autoliv? Access our full analysis report here, it’s free.
Zooming In On Goodyear (GT)
Goodyear’s shares are quite volatile and have had 19 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 12 days ago when the stock gained 0.2% on the news that the Dow Jones Industrial Average retook the 50,000 level, driven by 'remarkably strong' corporate fundamentals and a breakthrough in U.S.-China relations.
President Trump and President Xi agreed in Beijing to ensure the Strait of Hormuz remains open, a critical win for global manufacturing supply chains choked by Middle East conflict. Also, April retail sales rose 0.5%, matching estimates and signaling that demand for industrial-produced goods remains stable. Industrial companies build the machinery and infrastructure that power the global economy.
While the 1.9% jump in import prices reported confirmed that manufacturing inputs were still more expensive, the reduction in geopolitical risk and the easing of the 10-year yield to 4.46% lowered the cost of the long-term debt used to finance these massive industrial projects.
Goodyear is down 31.8% since the beginning of the year, and at $6.09 per share, it is trading 49% below its 52-week high of $11.94 from June 2025. Investors who bought $1,000 worth of Goodyear’s shares 5 years ago would now be looking at only $319.42.
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