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:
- Specialized Technology company Mirion (NYSE: MIR) jumped 6.7%. Is now the time to buy Mirion? Access our full analysis report here, it’s free for active Edge members.
- Office & Commercial Furniture company MillerKnoll (NASDAQ: MLKN) jumped 8.2%. Is now the time to buy MillerKnoll? Access our full analysis report here, it’s free for active Edge members.
- Business Process Outsourcing & Consulting company Concentrix (NASDAQ: CNXC) jumped 6.5%. Is now the time to buy Concentrix? Access our full analysis report here, it’s free for active Edge members.
- Professional Staffing & HR Solutions company First Advantage (NASDAQ: FA) jumped 7.9%. Is now the time to buy First Advantage? Access our full analysis report here, it’s free for active Edge members.
- Hardware & Infrastructure company HP (NYSE: HPQ) jumped 6.5%. Is now the time to buy HP? Access our full analysis report here, it’s free for active Edge members.
Zooming In On MillerKnoll (MLKN)
MillerKnoll’s shares are quite volatile and have had 16 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 9 days ago when the stock gained 2.9% on the news that investors continued to pile into value-oriented names amid growing valuation concerns. This shift reflected growing caution over high valuations within the technology and artificial intelligence (AI) spheres. As market participants reassessed risk, they reallocated capital from growth-heavy indices, like the Nasdaq, to companies in areas like industrials and financials, perceived to be more reasonably priced. Contributing to the positive momentum, markets remained hopeful that a prolonged 40-day government shutdown would be over. The U.S. Senate approved a compromise funding package, which was pending a vote in the House. The potential end to the shutdown brought a sense of relief to markets.
MillerKnoll is down 31.8% since the beginning of the year, and at $15.27 per share, it is trading 41% below its 52-week high of $25.89 from December 2024. Investors who bought $1,000 worth of MillerKnoll’s shares 5 years ago would now be looking at an investment worth $407.09.
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