What Happened?
Shares of global payments company American Express (NYSE: AXP) jumped 2.9% in the afternoon session after a new partnership with RewardPay was announced, creating a tax pooling payment system designed to reward businesses in New Zealand.
This system allowed companies to make tax payments using American Express cards, earning rewards and gaining up to 55 interest-free days, which helped improve cash flow. The move positioned American Express to increase its transaction volume in the business-to-business sector, especially among small and medium-sized companies seeking credit flexibility. Adding to the positive sentiment, RBC Capital raised its price target on the stock to $380 from $360, pointing to the strength of the company's customer base and its earnings growth outlook. Separately, the company also increased the annual fee on its Platinum cards by $200 but added new benefits in travel and dining credits.
After the initial pop the shares cooled down to $334.70, up 3.6% from previous close.
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What Is The Market Telling Us
American Express’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 14 days ago when the stock dropped 3.4% on the news that the U.S. government hurtled toward a potential shutdown, sparking economic uncertainty and weighing on investor confidence.
Market volatility increased as a partisan standoff pushed the federal government closer to a shutdown. If lawmakers fail to reach a spending agreement, a shutdown would begin, furloughing thousands of federal workers. This prospect has weighed on investor sentiment, creating a 'risk-off' mood in the markets as traders brace for potential economic disruption. The political uncertainty adds a layer of caution for investors heading into the final day of the month.
Adding to the weakness, a key report showed U.S. consumer confidence unexpectedly fell to a five-month low in September. The Conference Board's consumer confidence index slid to 94.2, a steeper drop than analysts had anticipated and its lowest reading since April. This downturn reflects growing pessimism among Americans about inflation and a weakening job market. Consumer confidence is a closely watched economic indicator as it gauges households' willingness to spend. A decline suggests that consumers may pull back on discretionary purchases, such as dining out or shopping for non-essential goods, which could negatively impact the future revenues and profits of companies in these sectors.
American Express is up 12.2% since the beginning of the year, and at $334.70 per share, it is trading close to its 52-week high of $342.31 from September 2025. Investors who bought $1,000 worth of American Express’s shares 5 years ago would now be looking at an investment worth $3,193.
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