What Happened?
A number of stocks jumped in the morning session after a key inflation report, the Personal Consumption Expenditures (PCE) price index, came in line with expectations.
This report, which is the Federal Reserve's preferred measure of inflation, showed that consumer prices rose 2.7% over the year in August, accelerating slightly from July but matching forecasts. The "core" PCE, which strips out volatile food and energy costs, increased by 2.9% annually, also meeting predictions. Investors often react positively when economic data aligns with expectations, as it reduces uncertainty about the Federal Reserve's future interest rate decisions.
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:
- Perishable Food company Cal-Maine (NASDAQ: CALM) jumped 3.1%. Is now the time to buy Cal-Maine? Access our full analysis report here, it’s free.
- Perishable Food company Vital Farms (NASDAQ: VITL) jumped 4.5%. Is now the time to buy Vital Farms? Access our full analysis report here, it’s free.
- Beverages, Alcohol, and Tobacco company Celsius (NASDAQ: CELH) jumped 3.4%. Is now the time to buy Celsius? Access our full analysis report here, it’s free.
Zooming In On Vital Farms (VITL)
Vital Farms’s shares are very volatile and have had 22 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 biggest move we wrote about over the last year was 5 months ago when the stock dropped 9.1% on the news that the company reported weak first quarter 2025 results which significantly beat analysts' EPS and EBITDA expectations, although its full-year EBITDA guidance slightly missed. The company stuck to its revenue forecast but guided EBITDA a bit lower than expected, citing supply constraints and macro uncertainty. Overall, we think this was still a solid quarter.
Vital Farms is up 10.4% since the beginning of the year, but at $42.89 per share, it is still trading 18.2% below its 52-week high of $52.41 from August 2025. Investors who bought $1,000 worth of Vital Farms’s shares 5 years ago would now be looking at an investment worth $1,079.
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