What Happened?
A number of stocks jumped in the afternoon session after comments from a key Federal Reserve official bolstered hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.
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:
- Travel and Vacation Providers company Royal Caribbean (NYSE: RCL) jumped 5.1%. Is now the time to buy Royal Caribbean? Access our full analysis report here, it’s free for active Edge members.
- Travel and Vacation Providers company Carnival (NYSE: CCL) jumped 5.3%. Is now the time to buy Carnival? Access our full analysis report here, it’s free for active Edge members.
- Leisure Facilities company AMC Entertainment (NYSE: AMC) jumped 5.1%. Is now the time to buy AMC Entertainment? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Carnival (CCL)
Carnival’s shares are quite volatile and have had 18 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 gained 8.3% on the news that after the cruise line operator reported record second-quarter results that sailed past analyst expectations and raised its full-year profit forecast.
The company posted record second-quarter revenues of $6.3 billion and an adjusted net income that more than tripled compared to the same period last year. This performance was driven by strong, sustained demand and robust onboard spending from passengers. Notably, Carnival announced it had already surpassed its 2026 financial targets 18 months ahead of schedule, including key metrics for profitability and return on invested capital. The company also raised its full-year guidance, now expecting adjusted net income to climb by over 40% compared to 2024, signaling strong confidence in its continued momentum.
Carnival is up 6.4% since the beginning of the year, but at $26.60 per share, it is still trading 18.1% below its 52-week high of $32.49 from August 2025. Investors who bought $1,000 worth of Carnival’s shares 5 years ago would now be looking at an investment worth $1,463.
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