What Happened?
A number of stocks jumped 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 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:
- Apparel Retailer company Torrid (NYSE: CURV) jumped 3%. Is now the time to buy Torrid? Access our full analysis report here, it’s free.
- Vehicle Retailer company America's Car-Mart (NASDAQ: CRMT) jumped 3%. Is now the time to buy America's Car-Mart? Access our full analysis report here, it’s free.
- Auto Parts Retailer company Monro (NASDAQ: MNRO) jumped 4%. Is now the time to buy Monro? Access our full analysis report here, it’s free.
- Boat & Marine Retailer company OneWater (NASDAQ: ONEW) jumped 5.7%. Is now the time to buy OneWater? Access our full analysis report here, it’s free.
- Home Furniture Retailer company Sleep Number (NASDAQ: SNBR) jumped 18.7%. Is now the time to buy Sleep Number? Access our full analysis report here, it’s free.
Zooming In On Sleep Number (SNBR)
Sleep Number’s shares are extremely volatile and have had 89 moves greater than 5% over the last year. But moves this big are rare even for Sleep Number and indicate this news significantly impacted the market’s perception of the business.
Sleep Number is down 26.8% since the beginning of the year, and at $10.94 per share, it is trading 46.4% below its 52-week high of $20.41 from December 2024. Investors who bought $1,000 worth of Sleep Number’s shares 5 years ago would now be looking at an investment worth $238.14.
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