What Happened?
A number of stocks fell in the afternoon session after fresh economic data revealed a significant drop in consumer confidence, stoking fears of a slowdown in household spending.
The pivotal event influencing market sentiment was the release of the Conference Board's September Consumer Confidence Index, which fell to 94.2, its lowest reading since April. This drop was primarily driven by growing pessimism among Americans regarding the job market and persistent inflation concerns.
Economists noted that this erosion in confidence could directly translate into reduced spending on non-essential items. Compounding the negative sentiment, the housing market showed further signs of cooling, with home price growth slowing. Furthermore, the looming threat of a U.S. government shutdown added another layer of uncertainty, prompting investors to pull back from sectors reliant on robust consumer spending.
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:
- Casino Operator company Bally's (NYSE: BALY) fell 3.2%. Is now the time to buy Bally's? Access our full analysis report here, it’s free.
- Real Estate Services company Offerpad (NYSE: OPAD) fell 8.2%. Is now the time to buy Offerpad? Access our full analysis report here, it’s free.
- Real Estate Services company Zillow (NASDAQ: ZG) fell 3.7%. Is now the time to buy Zillow? Access our full analysis report here, it’s free.
- Leisure Products company Clarus (NASDAQ: CLAR) fell 3.1%. Is now the time to buy Clarus? Access our full analysis report here, it’s free.
Zooming In On Offerpad (OPAD)
Offerpad’s shares are extremely volatile and have had 95 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 4 days ago when the stock gained 2.3% on the news that key inflation data (PCE) aligned with forecasts, bolstering hopes for continued interest rate cuts from the Federal Reserve.
The Personal Consumption Expenditures (PCE) price index, the central bank's preferred gauge of inflation, showed a slight year-over-year increase in August but did not surprise economists. This report was met with relief on Wall Street, as it suggests inflationary pressures remain contained, giving the Federal Reserve more leeway to continue its monetary easing policy. Investors interpreted the news as a positive sign that the Fed can support the economy without risking runaway inflation. The positive sentiment helped the major indices claw back some of the losses from a recent three-day slide, with stocks rising across various sectors.
Offerpad is up 55.6% since the beginning of the year, but at $4.17 per share, it is still trading 33.1% below its 52-week high of $6.23 from August 2025. Investors who bought $1,000 worth of Offerpad’s shares at the IPO in December 2020 would now be looking at an investment worth $27.31.
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