What Happened?

A number of stocks jumped in the afternoon session after comments from a key Federal Reserve official hinted at a potential interest rate cut in December. 

John Williams, president of the Federal Reserve Bank of New York, signaled he was open to lowering the fed funds rate—the key interest rate that banks charge each other for overnight loans—to support the job market. Speaking at an event, Williams stated that he sees “room for a further adjustment” for interest rates, which immediately shifted market expectations. Following his remarks, the perceived likelihood of an interest rate cut at the Federal Reserve's December meeting flipped from unlikely to more likely than not. The prospect of lower borrowing costs sent a wave of optimism through the markets, leading to a rally in major indices like the S&P 500, Dow Jones Industrial Average, and the Nasdaq Composite.

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:

• Industrial & Environmental Services company Pitney Bowes (NYSE: PBI) jumped 3.3%. Is now the time to buy Pitney Bowes? Access our full analysis report here, it’s free for active Edge members.
• IT Distribution & Solutions company CDW (NASDAQ: CDW) jumped 3.3%. Is now the time to buy CDW? Access our full analysis report here, it’s free for active Edge members.
• IT Distribution & Solutions company Connection (NASDAQ: CNXN) jumped 3.2%. Is now the time to buy Connection? Access our full analysis report here, it’s free for active Edge members.
• Hardware & Infrastructure company Diebold Nixdorf (NYSE: DBD) jumped 3.1%. Is now the time to buy Diebold Nixdorf? Access our full analysis report here, it’s free for active Edge members.
• Hardware & Infrastructure company Hewlett Packard Enterprise (NYSE: HPE) jumped 3%. Is now the time to buy Hewlett Packard Enterprise? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Pitney Bowes (PBI)

Pitney Bowes’s shares are quite volatile and have had 15 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 17 days ago when the stock dropped 3.2% on the news that markets became increasingly wary of high valuations following a significant AI-driven rally. 

The tech-heavy Nasdaq fell approximately 1.4% as a wave of caution swept through the market. A key example of this trend is Palantir Technologies, which saw its shares drop around 7% despite reporting record quarterly results that surpassed analyst estimates and raising its full-year revenue outlook. This seemingly contradictory movement highlighted a broader sentiment shift. Investors appeared to be engaging in profit-taking, concerned that the recent surge in AI-related stocks had led to stretched valuations. This broader market caution affected high-growth technology companies that had previously surged on AI optimism but faced increased scrutiny, signaling a potential cooling-off period for the sector. Adding serious weight to this caution, leadership at both Goldman Sachs and Morgan Stanley highlighted the possibility of a correction in the equity markets over the next couple of years. Despite the euphoria driven by AI optimism and the promise of future rate cuts, these banks viewed this cooling-off period not as a disaster, but as a necessary and healthy feature of a long-term bull market.

Pitney Bowes is up 35.5% since the beginning of the year, but at $9.78 per share, it is still trading 23.5% below its 52-week high of $12.79 from July 2025. Investors who bought $1,000 worth of Pitney Bowes’s shares 5 years ago would now be looking at an investment worth $1,734.

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