What Happened?

Shares of personal care and home fragrance retailer Bath & Body Works (NYSE: BBWI) jumped 3.5% in the afternoon session after markets continued to rally amid growing investor optimism for a Federal Reserve interest rate cut in September. This optimism was spurred by a recent Consumer Price Index (CPI) report that did not show runaway inflation, increasing the perceived probability of a rate cut to over 90%. Lower interest rates are generally seen as a positive for the economy as they reduce borrowing costs for consumers, which can stimulate spending on non-essential goods. Consequently, investors bid up shares in the apparel, home furnishings, and automotive retail industries in anticipation of stronger consumer demand.

The shares closed the day at $29.58, up 3.7% from previous close.

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What Is The Market Telling Us

Bath and Body Works’s shares are very volatile and have had 23 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.

Bath and Body Works is down 22.3% since the beginning of the year, and at $29.45 per share, it is trading 28.3% below its 52-week high of $41.08 from February 2025. Investors who bought $1,000 worth of Bath and Body Works’s shares 5 years ago would now be looking at an investment worth $1,110.

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