What Happened?
A number of stocks jumped in the afternoon session after the latest Consumer Price Index (CPI) report came in largely as expected, reinforcing investor hopes for an upcoming Federal Reserve interest rate cut.
Data from the Bureau of Labor Statistics showed headline inflation for August at a 2.9% annual rate, with core inflation, which excludes volatile food and energy prices, holding steady at 3.1%. While inflation remains above the Federal Reserve's target, Wall Street interpreted the figures as not being high enough to prevent a widely anticipated rate reduction at the central bank's meeting next week. Analysts note that the Fed's focus has shifted toward the risks of a cooling labor market. With this report being the last key data point before the meeting, the market's conviction for a rate cut strengthened, fueling a broad rally that pushed major U.S. stock indexes to record highs.
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:
- Footwear company Steven Madden (NASDAQ: SHOO) jumped 4.1%. Is now the time to buy Steven Madden? Access our full analysis report here, it’s free.
- Leisure Facilities company Lucky Strike (NYSE: LUCK) jumped 4.7%. Is now the time to buy Lucky Strike? Access our full analysis report here, it’s free.
- Leisure Products company Malibu Boats (NASDAQ: MBUU) jumped 4.7%. Is now the time to buy Malibu Boats? Access our full analysis report here, it’s free.
- Real Estate Services company CBRE (NYSE: CBRE) jumped 2.6%. Is now the time to buy CBRE? Access our full analysis report here, it’s free.
- Real Estate Services company Newmark (NASDAQ: NMRK) jumped 2.6%. Is now the time to buy Newmark? Access our full analysis report here, it’s free.
Zooming In On Malibu Boats (MBUU)
Malibu Boats’s shares are quite volatile and have had 16 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 2 days ago when the stock dropped 2.8% on the news that a significant downward revision of U.S. job creation data raised concerns about the health of the economy.
The Labor Department reported that employers added 911,000 fewer jobs from April 2024 through March 2025 than initially estimated. This revision brings the average monthly job gains during that period down significantly, suggesting a cooler labor market. The downgrades were widespread across various service sectors. The largest revisions were seen in leisure and hospitality, which added 176,000 fewer jobs than first reported, followed by professional and business services and retail. Such data is closely watched by investors and economists as it can influence the Federal Reserve's decisions on interest rates.
JPMorgan Chase CEO Jamie Dimon warned that the U.S. economy is "weakening," though he stopped short of predicting a recession. "Whether it's on the way to recession or just weakening, I don't know," he said. Dimon's remarks are closely watched, given his influence as head of one of the nation's largest banks.
Malibu Boats is down 6.9% since the beginning of the year, and at $33.86 per share, it is trading 25.3% below its 52-week high of $45.30 from November 2024. Investors who bought $1,000 worth of Malibu Boats’s shares 5 years ago would now be looking at an investment worth $696.71.
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