What Happened?
A number of stocks fell in the afternoon session after the CPI report showed 4.2% annual inflation, the highest in three years, with markets fully pricing a December Fed rate hike.
For capital-intensive industrial businesses, tighter financing conditions directly crimp investment planning and acquisition economics. The Iran conflict added supply chain pressure: Tehran targeted Bahrain, Kuwait, and Jordan with missile attacks, and Trump pledged mid-session to “attack very hard,” sending the Dow to session lows.
A widening Gulf conflict raises energy input costs and introduces uncertainty across the cross-border logistics networks that manufacturing-heavy industrials depend on. Companies with exposure to global trade flows absorbed the most pressure. Defense names within the sector remained partially insulated.
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:
Zooming In On Lucid (LCID)
Lucid’s shares are extremely volatile and have had 56 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 15 days ago when the stock gained 3.2% on the news that 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.
Lucid is down 57.3% since the beginning of the year, and at $4.77 per share, it is trading 84.8% below its 52-week high of $31.30 from July 2025. Investors who bought $1,000 worth of Lucid’s shares 5 years ago would now be looking at only $18.77.
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