What Happened?
A number of stocks jumped in the afternoon session after 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.
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:
- Senior Health, Home Health & Hospice company Brookdale (NYSE: BKD) jumped 5.4%. Is now the time to buy Brookdale? Access our full analysis report here, it’s free.
- Research Tools & Consumables company Mettler-Toledo (NYSE: MTD) jumped 4%. Is now the time to buy Mettler-Toledo? Access our full analysis report here, it’s free.
- Advertising Software company Integral Ad Science (NASDAQ: IAS) jumped 3.6%. Is now the time to buy Integral Ad Science? Access our full analysis report here, it’s free.
- Professional Staffing & HR Solutions company Barrett (NASDAQ: BBSI) jumped 4.5%. Is now the time to buy Barrett? Access our full analysis report here, it’s free.
- Hardware & Infrastructure company Hewlett Packard Enterprise (NYSE: HPE) jumped 3.6%. Is now the time to buy Hewlett Packard Enterprise? Access our full analysis report here, it’s free.
Zooming In On Brookdale (BKD)
Brookdale’s shares are quite volatile and have had 15 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 9 days ago when the stock gained 3% on the news that markets continued to rally amid growing speculation of an impending interest rate cut by the Federal Reserve. Following a favorable Consumer Price Index (CPI) report, investors are increasingly betting on a rate reduction next month, a sentiment amplified by U.S. Treasury Secretary Scott Bessent's call for a significant cut. This has fueled a 'risk-on' environment across Wall Street. Lower interest rates are typically beneficial for growth-oriented sectors like healthcare, as they reduce the cost of borrowing for research and innovation and increase the present value of future earnings.
Brookdale is up 51% since the beginning of the year, and at $7.64 per share, it is trading close to its 52-week high of $7.95 from July 2025. Investors who bought $1,000 worth of Brookdale’s shares 5 years ago would now be looking at an investment worth $2,719.
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