What Happened?
A number of stocks jumped in the afternoon session after a key inflation report came in cooler than anticipated, fueling optimism for potential interest rate cuts. The September Consumer Price Index (CPI) indicated a 3.0% year-over-year increase, just below the 3.1% forecast, with a monthly rise of 0.3% also below estimates. Investors viewed this data as a strong signal that inflationary pressures are subsiding. This development has increased speculation that the Federal Reserve may have more room to implement interest rate cuts in the near future. Easing monetary policy typically lowers borrowing costs for companies and can make stocks more attractive, which explains the broad-based rally across Wall Street.
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:
- Sit-Down Dining company Bloomin' Brands (NASDAQ: BLMN) jumped 6.9%. Is now the time to buy Bloomin' Brands? Access our full analysis report here, it’s free for active Edge members.
- Traditional Fast Food company Papa John's (NASDAQ: PZZA) jumped 4.4%. Is now the time to buy Papa John's? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Bloomin' Brands (BLMN)
Bloomin' Brands’s shares are extremely volatile and have had 48 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 14 days ago when the stock dropped 7% on the news that President Donald Trump threatened to impose "massive" tariffs on Chinese products, reigniting trade war fears. The unexpected social media post was a stated countermeasure to Beijing's recent announcement of new export controls on rare-earth minerals. These minerals are critical components for manufacturing everything from consumer electronics to jet engines, and the news jolted a previously calm Wall Street. The renewed fears of a trade war sent all major indices into negative territory. The tech-heavy Nasdaq Composite saw the steepest decline, falling 1.7%, as investors weighed the potential impact of supply chain disruptions for key manufacturing components.
Bloomin' Brands is down 33.3% since the beginning of the year, and at $7.98 per share, it is trading 53.1% below its 52-week high of $17.02 from October 2024. Investors who bought $1,000 worth of Bloomin' Brands’s shares 5 years ago would now be looking at an investment worth $523.85.
Do you want to know what moves the business you care about? Add them to your StockStory watchlist and every time a stock significantly moves, we provide you with a timely explanation straight to your inbox. It’s free for active Edge members and will only take you a second.
