What Happened?
A number of stocks jumped in the afternoon session after renewed enthusiasm for Alphabet reinvigorated the artificial intelligence trade, propelling a market rebound heading into the Thanksgiving holiday.
The Nasdaq index jumped 2.6% and the S&P 500 gained 1.6%, driven by a 5% rally in Alphabet following the announcement of its upgraded Gemini 3 AI model. This optimism spilled over into the broader tech sector. The rally built on momentum from the previous trading session, sparked by the New York Fed president keeping the door open for a December interest rate cut.
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:
- Real Estate Services company Compass (NYSE: COMP) jumped 6.3%. Is now the time to buy Compass? Access our full analysis report here, it’s free for active Edge members.
- Real Estate Services company The Real Brokerage (NASDAQ: REAX) jumped 5.7%. Is now the time to buy The Real Brokerage? Access our full analysis report here, it’s free for active Edge members.
- Travel and Vacation Providers company Hilton Grand Vacations (NYSE: HGV) jumped 2.6%. Is now the time to buy Hilton Grand Vacations? Access our full analysis report here, it’s free for active Edge members.
- Leisure Products company Harley-Davidson (NYSE: HOG) jumped 2.8%. Is now the time to buy Harley-Davidson? Access our full analysis report here, it’s free for active Edge members.
- Leisure Products company Polaris (NYSE: PII) jumped 2.8%. Is now the time to buy Polaris? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Compass (COMP)
Compass’s shares are very volatile and have had 21 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 3 days ago when the stock gained 7.7% on the news that comments from a key Federal Reserve official bolstered hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.
Compass is up 80.2% since the beginning of the year, and at $10.45 per share, has set a new 52-week high. Investors who bought $1,000 worth of Compass’s shares at the IPO in March 2021 would now be looking at an investment worth $518.61.
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