What Happened?
A number of stocks jumped in the afternoon session as markets rotated into defensive names following the release of the May CPI report.
The headline 4.2% annual inflation reading spooked the market, but the breakdown matters: energy drove more than 60% of May's monthly price increase, while food at home rose just 0.1% and core inflation came in at only 0.2% for the month. For staples companies whose input costs are food, packaging, and household goods that is a margin reprieve.
The World Cup, which kicks off later in the week across U.S., Mexican, and Canadian host cities, added a near-term catalyst. Goldman Sachs has buy ratings on AB InBev, Constellation Brands, and Heineken specifically on tournament beer 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:
- Shelf-Stable Food company Simply Good Foods (NASDAQ: SMPL) jumped 3%. Is now the time to buy Simply Good Foods? Access our full analysis report here, it’s free.
- Shelf-Stable Food company J. M. Smucker (NYSE: SJM) jumped 3.2%. Is now the time to buy J. M. Smucker? Access our full analysis report here, it’s free.
- Perishable Food company Flowers Foods (NYSE: FLO) jumped 2.5%. Is now the time to buy Flowers Foods? Access our full analysis report here, it’s free.
Zooming In On J. M. Smucker (SJM)
J. M. Smucker’s shares are not very volatile and have only had 3 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 11.7% on the news that the company reported stronger-than-expected first-quarter 2026 financial results, beating both revenue and earnings forecasts.
For the quarter, net sales grew 5.8% year-over-year to $2.27 billion, and its adjusted earnings per share (EPS) saw a significant 20% increase to $2.77, surpassing analyst estimates. Looking ahead, the company provided an adjusted EPS guidance of $10 at the midpoint for its 2027 financial year, which also beat Wall Street's expectations. Investors appeared to focus on the strong quarterly profit performance and the upbeat earnings outlook for the full year.
J. M. Smucker is up 20.4% since the beginning of the year, and at $116.35 per share, it has set a new 52-week high. Despite the year-to-date gain, investors who bought $1,000 worth of J. M. Smucker’s shares 5 years ago would now be looking at only $857.41.
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