What Happened?
A number of stocks fell in the afternoon session after Treasury yields spiked to multi-year highs, pushing 30-year mortgage rate expectations up with them and threatening already-fragile new-home demand.
Building materials companies sell aggregates, cement, and wallboard that go into housing starts and infrastructure. When mortgages get more expensive, fewer homes break ground, and orders for these inputs slow. There's a second hit working in parallel: diesel. Crude hovered near $108–$110 per barrel because of the unresolved U.S.–Iran conflict, and diesel prices account for a significant percentage of cost of goods sold for these companies. So the same headline kills demand (high rates) also raises their input costs (high oil), squeezing margins from both ends.
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:
- Building Materials company Carlisle (NYSE: CSL) fell 3.2%. Is now the time to buy Carlisle? Access our full analysis report here, it’s free.
- Building Materials company Resideo (NYSE: REZI) fell 4.3%. Is now the time to buy Resideo? Access our full analysis report here, it’s free.
- Building Materials company Martin Marietta Materials (NYSE: MLM) fell 3.3%. Is now the time to buy Martin Marietta Materials? Access our full analysis report here, it’s free.
- Building Materials company Armstrong World (NYSE: AWI) fell 2.9%. Is now the time to buy Armstrong World? Access our full analysis report here, it’s free.
Zooming In On Resideo (REZI)
Resideo’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 biggest move we wrote about over the last year was 6 months ago when the stock dropped 23.6% on the news that the company reported mixed third-quarter 2025 financial results, with an earnings beat overshadowed by a revenue miss and a weak outlook.
Resideo surpassed adjusted earnings per share (EPS) expectations, reporting $0.89 against a forecast of $0.69. However, the company's revenue of $1.86 billion came in slightly below the expected $1.87 billion. Adding to investor concerns, Resideo provided a weak forecast. The company guided for fourth-quarter revenue of $1.87 billion, falling short of analysts' $1.92 billion estimates.
Furthermore, management lowered its full-year adjusted EPS guidance by 6.8% to $2.62 at the midpoint. The sharp decline in the stock price suggested that investors focused more on the revenue shortfall and downbeat guidance than the positive earnings surprise.
Resideo is down 23.2% since the beginning of the year, and at $26.99 per share, it is trading 39.3% below its 52-week high of $44.50 from October 2025. Investors who bought $1,000 worth of Resideo’s shares 5 years ago would now be looking at only $947.68.
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