What Happened?
A number of stocks jumped in the afternoon session after the latest Consumer Price Index (CPI) report came in largely as expected, reinforcing investor hopes for an upcoming Federal Reserve interest rate cut.
Data from the Bureau of Labor Statistics showed headline inflation for August at a 2.9% annual rate, with core inflation, which excludes volatile food and energy prices, holding steady at 3.1%. While inflation remains above the Federal Reserve's target, Wall Street interpreted the figures as not being high enough to prevent a widely anticipated rate reduction at the central bank's meeting next week. Analysts note that the Fed's focus has shifted toward the risks of a cooling labor market. With this report being the last key data point before the meeting, the market's conviction for a rate cut strengthened, fueling a broad rally that pushed major U.S. stock indexes to record highs.
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:
- Education Services company Perdoceo Education (NASDAQ: PRDO) jumped 3.5%. Is now the time to buy Perdoceo Education? Access our full analysis report here, it’s free.
- Education Services company Universal Technical Institute (NYSE: UTI) jumped 2.9%. Is now the time to buy Universal Technical Institute? Access our full analysis report here, it’s free.
- Travel and Vacation Providers company Pursuit (NYSE: PRSU) jumped 3%. Is now the time to buy Pursuit? Access our full analysis report here, it’s free.
- Broadcasting company AMC Networks (NASDAQ: AMCX) jumped 4.2%. Is now the time to buy AMC Networks? Access our full analysis report here, it’s free.
- Specialized Consumer Services company Pool (NASDAQ: POOL) jumped 3.2%. Is now the time to buy Pool? Access our full analysis report here, it’s free.
Zooming In On AMC Networks (AMCX)
AMC Networks’s shares are extremely volatile and have had 31 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 1 day ago when the stock dropped 3.4% on the news that markets pulled back, reversing early gains, as investor sentiment remained cautious despite a softer-than-expected inflation reading.
Stocks rose in the morning session after an unexpected drop in the Producer Price Index (PPI) for August signaled easing inflation and raised expectations for a potential Federal Reserve interest rate cut. The U.S. Bureau of Labor Statistics reported that the PPI, which measures wholesale prices, edged down 0.1% the previous month, contrary to analyst expectations for a 0.3% rise. This data gives the Federal Reserve more flexibility to consider lowering interest rates to stimulate the economy.
AMC Networks is down 20% since the beginning of the year, and at $7.98 per share, it is trading 23.3% below its 52-week high of $10.41 from January 2025. Investors who bought $1,000 worth of AMC Networks’s shares 5 years ago would now be looking at an investment worth $382.55.
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