What Happened?

A number of stocks jumped in the afternoon session after investors grew more optimistic about a potential Federal Reserve interest rate cut in December. 

The positive sentiment was fueled by comments from New York Fed President John Williams, a voting member of the rate-setting Federal Open Market Committee, who stated the central bank could cut rates "in the near term" without jeopardizing its inflation targets. Following his remarks, market expectations for a rate cut in December shifted significantly. According to the CME FedWatch Tool, the probability of a December rate reduction surged from a 37% chance earlier in the day to 70%. While lower rates can compress bank profit margins, investors often view them as a catalyst for broader economic activity, potentially boosting loan demand and reducing the risk of defaults.

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:

• Personal Loan company FirstCash (NASDAQ: FCFS) jumped 2.6%. Is now the time to buy FirstCash? Access our full analysis report here, it’s free for active Edge members.
• Credit Card company Mastercard (NYSE: MA) jumped 2.6%. Is now the time to buy Mastercard? Access our full analysis report here, it’s free for active Edge members.
• Diversified Financial Services company Western Union (NYSE: WU) jumped 2.6%. Is now the time to buy Western Union? Access our full analysis report here, it’s free for active Edge members.
• Student Loan company Nelnet (NYSE: NNI) jumped 2.6%. Is now the time to buy Nelnet? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Mastercard (MA)

Mastercard’s shares are not very volatile and have only had 3 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.

Mastercard is up 3.8% since the beginning of the year, but at $542.28 per share, it is still trading 9.5% below its 52-week high of $598.96 from August 2025. Investors who bought $1,000 worth of Mastercard’s shares 5 years ago would now be looking at an investment worth $1,633.

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