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:
- Leisure Facilities company Lucky Strike (NYSE: LUCK) jumped 2.9%. Is now the time to buy Lucky Strike? Access our full analysis report here, it’s free for active Edge members.
- Apparel and Accessories company Ralph Lauren (NYSE: RL) jumped 3%. Is now the time to buy Ralph Lauren? Access our full analysis report here, it’s free for active Edge members.
- Apparel and Accessories company Under Armour (NYSE: UAA) jumped 2.9%. Is now the time to buy Under Armour? Access our full analysis report here, it’s free for active Edge members.
- Leisure Products company YETI (NYSE: YETI) jumped 2.8%. Is now the time to buy YETI? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Ralph Lauren (RL)
Ralph Lauren’s shares are not very volatile and have only had 9 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 3 days ago when the stock gained 4.6% 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.
Ralph Lauren is up 52% since the beginning of the year, and at $351.89 per share, has set a new 52-week high. Investors who bought $1,000 worth of Ralph Lauren’s shares 5 years ago would now be looking at an investment worth $3,952.
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