What Happened?

A number of stocks jumped in the afternoon session after the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.

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:

• Custody Bank company Invesco (NYSE: IVZ) jumped 4.5%. Is now the time to buy Invesco? Access our full analysis report here, it’s free.
• Credit Card company Capital One (NYSE: COF) jumped 4.6%. Is now the time to buy Capital One? Access our full analysis report here, it’s free.
• Credit Card company Bread Financial (NYSE: BFH) jumped 5%. Is now the time to buy Bread Financial? Access our full analysis report here, it’s free.
• Investment Banking & Brokerage company Piper Sandler (NYSE: PIPR) jumped 5%. Is now the time to buy Piper Sandler? Access our full analysis report here, it’s free.
• Investment Banking & Brokerage company Moelis (NYSE: MC) jumped 4.9%. Is now the time to buy Moelis? Access our full analysis report here, it’s free.

Zooming In On Piper Sandler (PIPR)

Piper Sandler’s shares are not very volatile and have only had 9 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 1 day ago when the stock dropped 5% on the news that markets continued to decline, as investors grew cautious ahead of a key speech by Federal Reserve Chair Jerome Powell. The move came as U.S. equity markets recorded a fifth consecutive day of losses for major indexes like the S&P 500, with technology stocks experiencing the largest declines. Investors have grown wary that the sharp rally in the tech sector since April may have advanced too far. The market-wide caution is largely driven by the upcoming Jackson Hole symposium, a meeting of central bankers, where traders are anxiously awaiting Fed Chair Powell's speech on Friday for guidance on the future path of interest rates.

Piper Sandler is up 12.1% since the beginning of the year, and at $335.58 per share, it is trading close to its 52-week high of $348.81 from November 2024. Investors who bought $1,000 worth of Piper Sandler’s shares 5 years ago would now be looking at an investment worth $4,337.

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