What Happened?

A number of stocks fell in the afternoon session after the U.S. government shutdown halted the release of crucial economic data, creating uncertainty for investors and policymakers. 

In its second week, the shutdown had stopped the flow of key federal figures on job creation and inflation. This came at a critical time, as the job market showed signs of slowing, and there were concerns that further declines could drag down the broader economy. 

In addition, Jamie Dimon raised concerns about a market correction. He added, "I would give it a higher probability than I think is probably priced in the market and by others, so if the market is pricing in 10%, I would ... say it's more like 30%." Dimon's remarks are closely watched given his influence as head of one of the nation's largest banks.

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:

• Specialized Technology company Napco (NASDAQ: NSSC) fell 2.5%. Is now the time to buy Napco? Access our full analysis report here, it’s free for active Edge members.
• Terrestrial Telecommunication Services company Lumen (NYSE: LUMN) fell 3.8%. Is now the time to buy Lumen? Access our full analysis report here, it’s free for active Edge members.
• IT Distribution & Solutions company CDW (NASDAQ: CDW) fell 3.7%. Is now the time to buy CDW? Access our full analysis report here, it’s free for active Edge members.
• Traditional Media & Publishing company IMAX (NYSE: IMAX) fell 1.7%. Is now the time to buy IMAX? Access our full analysis report here, it’s free for active Edge members.
• IT Distribution & Solutions company TD SYNNEX (NYSE: SNX) fell 2.8%. Is now the time to buy TD SYNNEX? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Lumen (LUMN)

Lumen’s shares are extremely volatile and have had 50 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 1 day ago when the stock gained 2.2% as confidence in the artificial intelligence market was renewed, pushing both the S&P 500 and Nasdaq to new all-time intraday highs. The rebound was led by chipmaker Nvidia, whose shares rose nearly 2% after its CEO confirmed that demand for computing has "gone up substantially" in recent months. These comments helped reassure the market that the AI boom is supported by genuine demand, calming fears that were sparked a day earlier by a report questioning the profitability of Oracle's cloud business. The rally was strong enough to put the information technology sector on pace for a fresh closing high. This upward momentum occurred despite potential headwinds from an ongoing U.S. government shutdown, which entered its second week.

Lumen is up 21.9% since the beginning of the year, but at $6.84 per share, it is still trading 32.4% below its 52-week high of $10.12 from November 2024. Investors who bought $1,000 worth of Lumen’s shares 5 years ago would now be looking at an investment worth $676.56.

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