What Happened?
Shares of freight Delivery Company RXO (NYSE: RXO) fell 2.9% in the afternoon session after major indices pulled back from record highs reached the previous week.
The S&P 500 and Nasdaq were under pressure as the dominant artificial intelligence trade cooled off. Notable names like Nvidia were down as traders locked in profits following a banner year where the Nasdaq surged over 20%. With the S&P 500 recently hitting intraday highs near 6,945, this dip reflected a shift in internal momentum rather than a response to major economic news.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy RXO? Access our full analysis report here.
What Is The Market Telling Us
RXO’s shares are extremely volatile and have had 37 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 dropped 4.1% on the news that BofA Securities lowered its fourth-quarter 2025 adjusted EBITDA forecast for the company, citing near-term capacity tightening.
The research firm reduced its target for a key profitability measure to $18 million from $25 million, putting it below RXO's own guidance of $20-$30 million. The cut was attributed to several supply-side issues, including government crackdowns on driver qualifications and electronic logging devices. Reinforcing the negative sentiment, S&P Global Ratings also revised RXO's outlook to negative from stable, pointing to weaker-than-expected credit metrics within a soft freight market. This followed the company's disappointing third-quarter 2025 earnings.
RXO is down 47.7% since the beginning of the year, and at $12.37 per share, it is trading 53.9% below its 52-week high of $26.81 from January 2025. Investors who bought $1,000 worth of RXO’s shares at the IPO in October 2022 would now be looking at an investment worth $589.14.
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