What Happened?

A number of stocks fell in the afternoon session after the Dow Jones Industrial Average fell as much as 0.7%, reflecting lingering uncertainty, and capping off a volatile week which saw stocks enjoy some relief as President Donald Trump reduced tensions with European allies by backing off his threat of imposing new tariffs. 

Threats of tariffs initially created uncertainty for businesses, as they can lead to higher costs for multinational corporations and disrupt global supply chains. By withdrawing the threat, the administration removed a significant headwind for the market, prompting a relief rally. This development was a key factor in helping major indexes recover from earlier losses, even as some analysts noted that underlying geopolitical risks and market volatility remain concerns for investors.

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 Tecnoglass (NYSE: TGLS) fell 3.2%. Is now the time to buy Tecnoglass? Access our full analysis report here, it’s free.
• Agricultural Machinery company Deere (NYSE: DE) fell 2.4%. Is now the time to buy Deere? Access our full analysis report here, it’s free.
• Ground Transportation company Avis Budget Group (NASDAQ: CAR) fell 3.4%. Is now the time to buy Avis Budget Group? Access our full analysis report here, it’s free.
• Commercial Building Products company Insteel (NYSE: IIIN) fell 2.7%. Is now the time to buy Insteel? Access our full analysis report here, it’s free.
• Heavy Transportation Equipment company REV Group (NYSE: REVG) fell 3%. Is now the time to buy REV Group? Access our full analysis report here, it’s free.

Zooming In On Avis Budget Group (CAR)

Avis Budget Group’s shares are very volatile and have had 24 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 10 months ago when the stock gained 21.1% on the news that shares of car rental companies rose as the 25% tariffs announced by President Trump on all vehicles imported into the US suggested new vehicles might be more expensive. 

The thinking on the Street is pretty straightforward: if new cars get more expensive, consumers might hold off on buying. That puts rental and car-sharing companies in a good spot. If buying a new car suddenly feels more expensive, people might start looking for cheaper, more flexible options. Renting for a weekend trip, or even month-to-month deals, start to make a lot more sense. So investors are getting ahead of that curve. They're betting demand for these services picks up, which means better fleet utilization, stronger revenues, and possibly fatter margins for the big rental players.

Avis Budget Group is down 4.8% since the beginning of the year, and at $122.05 per share, it is trading 41.2% below its 52-week high of $207.55 from July 2025. Investors who bought $1,000 worth of Avis Budget Group’s shares 5 years ago would now be looking at an investment worth $2,975.

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