What Happened?
Shares of online legal service provider LegalZoom (NASDAQ: LZ) jumped 3% in the afternoon session after the latest Personal Consumption Expenditures (PCE) inflation report met expectations, bolstering investor confidence in potential future interest rate cuts by the Federal Reserve.
The August 2025 report, which is the Federal Reserve's preferred gauge for inflation, showed a slight year-over-year acceleration but crucially did not exceed economists' forecasts. This 'in-line' result was met with relief across the market, sending the Dow Jones Industrial Average up by approximately 300 points. Investors interpreted the data as a sign that the Fed's current monetary policy is effectively managing inflation. The news strengthens the case for the central bank to reduce interest rates in the future, fostering broader optimism about the U.S. economy's resilience.
The shares closed the day at $10.90, up 2.6% from previous close.
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What Is The Market Telling Us
LegalZoom’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 21 days ago when the stock dropped 4.1% on the news that the U.S. Labor Department's August jobs report came in much weaker than expected, sparking fears of an economic slowdown.
U.S. employers added only 22,000 jobs last month, significantly missing the 75,000 that economists had forecast. The disappointing data led to a widespread sell-off on Wall Street, with major indices like the S&P 500 and Dow Jones Industrial Average trading lower.
While a cooling labor market could prompt the Federal Reserve to cut interest rates, the scale of the miss has investors worried that the economy could be heading for a recession. This negative sentiment is weighing on the broader market, impacting individual stocks like LegalZoom.
LegalZoom is up 44% since the beginning of the year, and at $10.89 per share, it is trading close to its 52-week high of $11.18 from August 2025. Investors who bought $1,000 worth of LegalZoom’s shares at the IPO in June 2021 would now be looking at an investment worth $287.71.
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