What Happened?
A number of stocks jumped in the afternoon session after a cooler-than-expected inflation report boosted investor confidence and fueled expectations for a Federal Reserve interest rate cut. The positive inflation data, showing the softest increase in the core Consumer Price Index (CPI) since May, has led investors to believe the Federal Reserve will soon lower borrowing costs. Markets widely anticipating a 25 basis point rate cut at the next Fed meeting. This optimism was further supported by strong economic growth indicators, with both the services and manufacturing sectors showing accelerated activity according to the S&P Global Flash Purchasing Managers' Index (PMI) data. The combination of easing price pressures and a thriving economy overshadowed concerns about an ongoing government shutdown, sending major indices like the S&P 500 to new record highs.
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:
- Student Loan company Sallie Mae (NASDAQ: SLM) jumped 4.8%. Is now the time to buy Sallie Mae? Access our full analysis report here, it’s free for active Edge members.
- Personal Loan company Sezzle (NASDAQ: SEZL) jumped 2.5%. Is now the time to buy Sezzle? Access our full analysis report here, it’s free for active Edge members.
- Investment Banking & Brokerage company Jefferies (NYSE: JEF) jumped 3.8%. Is now the time to buy Jefferies? Access our full analysis report here, it’s free for active Edge members.
- Personal Loan company Dave (NASDAQ: DAVE) jumped 5.7%. Is now the time to buy Dave? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Dave (DAVE)
Dave’s shares are extremely volatile and have had 72 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 2 days ago when the stock dropped 6.9% on the news that new trade tensions and disappointing earnings from major tech companies weighed heavily on investor sentiment.
A key driver was the news that the White House is considering new restrictions on Chinese exports that use U.S. software, a move that could significantly impact technology companies. This uncertainty over escalating trade tensions created a broad sense of worry in the market. Simultaneously, shares of the semiconductor giant Texas Instruments dropped 6% after its latest earnings and future revenue forecast both came in weaker than expected, which is a big concern for the health of the tech industry. This poor performance from Texas Instruments immediately dragged down the entire semiconductor sector, causing other major chipmakers like Advanced Micro Devices and Micron Technology to also see significant declines.
Compounding the bad news, streaming service Netflix saw its stock slump 9% after it missed its earnings targets, partly blaming a tax dispute in Brazil. The combined effect of renewed trade war fears and the direct evidence of underperformance from influential companies in the technology sector was enough to push the major market indexes lower.
Dave is up 186% since the beginning of the year, but at $246.80 per share, it is still trading 12.4% below its 52-week high of $281.79 from July 2025. Investors who bought $1,000 worth of Dave’s shares at the IPO in April 2021 would now be looking at an investment worth $786.99.
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