What Happened?

A number of stocks jumped in the afternoon session after the Federal Reserve lowered its benchmark interest rate by a quarter-percentage point, signaling a more accommodative monetary policy. 

This dovish action, combined with highly accommodating signals from Chair Jerome Powell and the Federal Open Market Committee (FOMC), sent the Dow Jones Industrial Average and S&P 500 surging. The market's bullish reaction was rooted in several key takeaways from the Fed's announcement. Most significantly, the central bank confirmed it would begin expanding its balance sheet by buying short-term bonds, a move that injects critical liquidity and lowers short-term Treasury yields. Furthermore, the Fed signaled a shift in priority by removing language that described the labor market as "remaining low," suggesting it would be more focused on supporting economic growth. While the Fed's official forecast projected only one cut for the next year, traders immediately priced in the expectation of more aggressive easing, banking on at least two rate reductions. This widespread anticipation of sustained, low borrowing costs and the virtual certainty that rate hikes would be off the table boosted corporate valuations and created powerful momentum for the equity market rally.

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:

• Agricultural Machinery company The Toro Company (NYSE: TTC) jumped 4%. Is now the time to buy The Toro Company? Access our full analysis report here, it’s free for active Edge members.
• Specialty Equipment Distributors company Custom Truck One Source (NYSE: CTOS) jumped 6.6%. Is now the time to buy Custom Truck One Source? Access our full analysis report here, it’s free for active Edge members.
• Ground Transportation company U-Haul (NYSE: UHAL) jumped 5.2%. Is now the time to buy U-Haul? Access our full analysis report here, it’s free for active Edge members.
• General Industrial Machinery company Kadant (NYSE: KAI) jumped 4.7%. Is now the time to buy Kadant? Access our full analysis report here, it’s free for active Edge members.
• Home Builders company TopBuild (NYSE: BLD) jumped 4.4%. Is now the time to buy TopBuild? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Custom Truck One Source (CTOS)

Custom Truck One Source’s shares are extremely volatile and have had 33 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 22 days ago when the stock dropped 2.9% on the news that investors grew wary about the sustainability of the artificial intelligence-led boom, leading to a broad market decline. 

Nvidia slid 3% ahead of its earnings report, dragging down fellow "Magnificent Seven" peers despite a major partnership announcement with Anthropic, as investors increasingly question the durability of the AI rally. Market sentiment was further dampened by Bitcoin dropping below $90,000, signaling reduced risk appetite, and growing anxiety that the Federal Reserve may pause rate cuts in December, with the implied probability of a cut falling to roughly 50%. Adding to the weakness, Home Depot shares declined following an earnings miss and a cut to its full-year outlook. This combination of continued de-risking and valuation skepticism put the S&P 500 on pace for its fourth consecutive daily decline.

Custom Truck One Source is up 30.7% since the beginning of the year, and at $6.33 per share, it is trading close to its 52-week high of $6.74 from October 2025. Investors who bought $1,000 worth of Custom Truck One Source’s shares 5 years ago would now be looking at an investment worth $1,004.

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