What Happened?
A number of stocks jumped in the afternoon session after a cooler-than-expected inflation report fueled optimism for potential Federal Reserve interest rate cuts. The September Consumer Price Index (CPI) report indicated a 3.0% year-over-year increase in prices, just below the 3.1% that economists had forecast. While still above the Federal Reserve's 2% target, investors interpreted this softer inflation reading as a sign that price pressures are easing. This development increases the likelihood that the central bank may move to cut interest rates. Lower interest rates can benefit banks by reducing their cost of funding and potentially stimulating loan demand from businesses and consumers. The positive sentiment was widespread, contributing to a broader market rally that saw the S&P 500, Dow, and Nasdaq all reach 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:
- Regional Banks company Bank of Hawaii (NYSE: BOH) jumped 2.6%. Is now the time to buy Bank of Hawaii? Access our full analysis report here, it’s free for active Edge members.
- Regional Banks company Atlantic Union Bankshares (NYSE: AUB) jumped 3.7%. Is now the time to buy Atlantic Union Bankshares? Access our full analysis report here, it’s free for active Edge members.
- Regional Banks company QCR Holdings (NASDAQ: QCRH) jumped 4.9%. Is now the time to buy QCR Holdings? Access our full analysis report here, it’s free for active Edge members.
- Regional Banks company Merchants Bancorp (NASDAQ: MBIN) jumped 2.8%. Is now the time to buy Merchants Bancorp? Access our full analysis report here, it’s free for active Edge members.
- Regional Banks company Stock Yards Bank (NASDAQ: SYBT) jumped 3%. Is now the time to buy Stock Yards Bank? Access our full analysis report here, it’s free for active Edge members.
Zooming In On QCR Holdings (QCRH)
QCR Holdings’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be 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 4.1% on the news that the company reported third-quarter 2025 results that significantly surpassed Wall Street's expectations. The bank posted adjusted earnings per share (EPS) of $2.17, easily beating the consensus estimate of $1.74 by over 25%. Revenue also came in strong at $101.5 million, a 4.3% year-over-year increase and well ahead of the anticipated $90.78 million. Investors also likely viewed the 13.8% year-over-year growth in tangible book value per share (TBVPS), a key indicator of a bank's value, as a sign of fundamental strength, overshadowing a slight miss on net interest margin expectations.
QCR Holdings is down 3% since the beginning of the year, and at $76.89 per share, it is trading 18.1% below its 52-week high of $93.84 from November 2024. Investors who bought $1,000 worth of QCR Holdings’s shares 5 years ago would now be looking at an investment worth $2,536.
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