What Happened?
A number of stocks jumped in the afternoon session after the Trump administration announced a new peace deal that would lead to the reopening of the Strait of Hormuz.
Energy is embedded throughout construction materials manufacturing — cement kilns, glass furnaces, and steel mills are among the most energy-intensive industrial processes. When oil falls more than 5%, production energy costs decrease materially. Ocean freight costs for imported materials also ease as the Hormuz reopening removes rerouting surcharges that had applied since February. On the demand side, the 10-year Treasury yield fell to its lowest level since mid-May, signalling potential mortgage rate relief.
Construction materials sales follow new housing starts with a short lag: a housing market that begins to thaw as affordability improves generates orders months before the activity shows up in broader economic data.
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:
- Home Construction Materials company Trex (NYSE: TREX) jumped 3.3%. Is now the time to buy Trex? Access our full analysis report here, it’s free.
- Home Construction Materials company Quanex (NYSE: NX) jumped 2.9%. Is now the time to buy Quanex? Access our full analysis report here, it’s free.
Zooming In On Trex (TREX)
Trex’s shares are very volatile and have had 20 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 7 days ago when the stock gained 5.9% as industrial stocks recovered, carried by the broad market rebound and a read-through from AI-driven capital expenditure commitments.
AMD announced a £2 billion ($2.66 billion) five-year investment in the UK for AI research and infrastructure, a signal that data-centre construction and the equipment, logistics, and grid infrastructure supporting it continues to draw major capital. Easing Middle East tensions reinforced the sector's recovery. Iran signaled its initial wave of strikes was complete and President Trump called for an immediate ceasefire, pulling energy prices back from levels that would have raised input costs across manufacturing and freight.
Trex is up 31.7% since the beginning of the year, but at $47.17 per share, it is still trading 31.1% below its 52-week high of $68.49 from July 2025. Despite the year-to-date gain, investors who bought $1,000 worth of Trex’s shares 5 years ago would now be looking at only $474.63.
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