What Happened?
A number of stocks jumped in the afternoon session after comments from a key Federal Reserve official bolstered hopes for an interest rate cut. The positive sentiment followed comments from New York Federal Reserve President John Williams, a voting member of the rate-setting Federal Open Market Committee (FOMC), who indicated he sees room for further policy easing. Following his remarks, the probability of a December rate cut surged from 39% to 71%, according to the CME FedWatch Tool, causing Treasury yields to fall. Lower interest rates can be particularly beneficial for growth-oriented sectors like software, as they increase the present value of future earnings. This renewed hope provided a boost to the sector, which had recently faced pressure from concerns over high valuations in artificial intelligence.
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:
- Tax Software company Intuit (NASDAQ: INTU) jumped 5.5%. Is now the time to buy Intuit? Access our full analysis report here, it’s free for active Edge members.
- Content Delivery company Fastly (NYSE: FSLY) jumped 4.9%. Is now the time to buy Fastly? Access our full analysis report here, it’s free for active Edge members.
- Sales Software company ZoomInfo (NASDAQ: GTM) jumped 4.8%. Is now the time to buy ZoomInfo? Access our full analysis report here, it’s free for active Edge members.
- Vertical Software company Alarm.com (NASDAQ: ALRM) jumped 5%. Is now the time to buy Alarm.com? Access our full analysis report here, it’s free for active Edge members.
- Design Software company Adobe (NASDAQ: ADBE) jumped 4.4%. Is now the time to buy Adobe? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Intuit (INTU)
Intuit’s shares are not very volatile and have only had 7 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 biggest move we wrote about over the last year was 9 months ago when the stock gained 13.6% on the news that the company delivered strong fourth-quarter 2024 results, beating analysts' billings forecasts as revenue climbed 17% year on year. Growth came from a 19% jump in its Global Business Solutions Group, powered by QuickBooks and Mailchimp, while Credit Karma revenue soared 36%, driven by rising demand for credit cards and personal loans. Profits grew even faster. Operating income surged 61% under GAAP accounting, while non-GAAP operating income rose 26%, thanks to better margins. This strength lifted non-GAAP EPS by 26%, topping expectations. For the full year, the company reaffirmed its outlook. Overall, the quarter was strong, with solid revenue and profit growth, though the unchanged full-year forecast signals stable rather than accelerating momentum.
Intuit is up 6.7% since the beginning of the year, but at $664.66 per share, it is still trading 17.7% below its 52-week high of $807.39 from July 2025. Investors who bought $1,000 worth of Intuit’s shares 5 years ago would now be looking at an investment worth $1,936.
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