What Happened?

A number of stocks jumped in the afternoon session after stocks continued to rally as investor optimism grew for a potential Federal Reserve interest rate cut in September. This optimism was largely fueled by a recent consumer price index report that showed inflation easing, along with public comments from Treasury Secretary Scott Bessent advocating for a significant 50-basis-point rate cut. The prospect of lower borrowing costs tends to boost rate-sensitive sectors like Business Services, as it can encourage companies to increase spending on consulting, IT projects, and staffing.

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:

• Digital Media & Content Platforms company IAC (NASDAQ: IAC) jumped 4.3%. Is now the time to buy IAC? Access our full analysis report here, it’s free.
• Professional Staffing & HR Solutions company Kforce (NYSE: KFRC) jumped 4%. Is now the time to buy Kforce? Access our full analysis report here, it’s free.
• Government & Technical Consulting company ICF International (NASDAQ: ICFI) jumped 4.4%. Is now the time to buy ICF International? Access our full analysis report here, it’s free.
• Electronic Components & Manufacturing company Plexus (NASDAQ: PLXS) jumped 3.1%. Is now the time to buy Plexus? Access our full analysis report here, it’s free.
• Business Process Outsourcing & Consulting company Huron (NASDAQ: HURN) jumped 3.1%. Is now the time to buy Huron? Access our full analysis report here, it’s free.

Zooming In On ICF International (ICFI)

ICF International’s shares are not very volatile and have only had 7 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.

The previous big move we wrote about was 12 days ago when the stock gained 9.1% on the news that it reported second-quarter results that showed stronger-than-expected profits, fueled by significant growth in its commercial energy business. Investors looked past a slight revenue miss, focusing instead on earnings per share of $1.66, which beat analyst forecasts. The company's commercial energy division delivered a remarkable 27% year-over-year revenue increase, offsetting challenges in the federal government sector. A strong book-to-bill ratio of 1.30 pointed to a healthy pipeline of future work. Management also reaffirmed its full-year guidance and signaled a return to growth in 2026, which further boosted investor sentiment.

ICF International is down 15.5% since the beginning of the year, and at $99.66 per share, it is trading 43.4% below its 52-week high of $176.06 from October 2024. Investors who bought $1,000 worth of ICF International’s shares 5 years ago would now be looking at an investment worth $1,374.

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