What Happened?

A number of stocks jumped in the afternoon session after the earnings season got off to a strong start as several big banks reported third-quarter results that surpassed Wall Street's expectations. 

The positive results were driven by a rebound in investment banking and strong trading desk performance. JPMorgan Chase reported a significant jump in profit and revenue, boosted by increased trading and dealmaking. Similarly, Wells Fargo saw its shares climb after reporting strong net interest income and raising its guidance. Citigroup also exceeded revenue estimates across all its business lines. While Goldman Sachs also beat expectations, its shares dipped slightly on news of potential job cuts aimed at curbing costs. Overall, the strong reports from these financial giants suggest a healthy pickup in corporate activity and trading. 

Also, Fed Chair Jerome Powell gave investors a major reason for optimism by suggesting the Fed could soon stop its quantitative tightening (QT) program. For months, this policy acted like a brake on the economy, systematically draining cash from the financial system to cool inflation. Powell's comments signal that the Fed may be ready to ease its pressure, which would leave more liquidity in the market to flow into assets like stocks.

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:

• Regional Banks company Hope Bancorp (NASDAQ: HOPE) jumped 3.9%. Is now the time to buy Hope Bancorp? Access our full analysis report here, it’s free for active Edge members.
• Regional Banks company German American Bancorp (NASDAQ: GABC) jumped 3.5%. Is now the time to buy German American Bancorp? Access our full analysis report here, it’s free for active Edge members.
• Regional Banks company Fulton Financial (NASDAQ: FULT) jumped 4%. Is now the time to buy Fulton Financial? Access our full analysis report here, it’s free for active Edge members.
• Regional Banks company FirstSun Capital Bancorp (NASDAQ: FSUN) jumped 3.9%. Is now the time to buy FirstSun Capital Bancorp? Access our full analysis report here, it’s free for active Edge members.
• Regional Banks company First Busey (NASDAQ: BUSE) jumped 4.1%. Is now the time to buy First Busey? Access our full analysis report here, it’s free for active Edge members.

Zooming In On First Busey (BUSE)

First Busey’s shares are not very volatile and have only had 4 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 about 2 months ago when the stock gained 4.2% on the news that the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.

First Busey is up 2.9% since the beginning of the year, but at $23.75 per share, it is still trading 13.8% below its 52-week high of $27.55 from November 2024. Investors who bought $1,000 worth of First Busey’s shares 5 years ago would now be looking at an investment worth $1,420.

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