What Happened?
A number of stocks jumped in the afternoon session after markets continued to rally as investor optimism grew for a potential Federal Reserve interest rate cut in September. This optimism was largely fueled by a recent consumer price index report that showed inflation easing, along with public comments from Treasury Secretary Scott Bessent advocating for a significant 50-basis-point rate cut. The prospect of lower borrowing costs tends to boost rate-sensitive sectors like Business Services, as it can encourage companies to increase spending on consulting, IT projects, and staffing.
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:
- Office & Commercial Furniture company Interface (NASDAQ: TILE) jumped 4.1%. Is now the time to buy Interface? Access our full analysis report here, it’s free.
- IT Services & Consulting company Kyndryl (NYSE: KD) jumped 3.1%. Is now the time to buy Kyndryl? Access our full analysis report here, it’s free.
- IT Services & Consulting company ASGN (NYSE: ASGN) jumped 3.1%. Is now the time to buy ASGN? Access our full analysis report here, it’s free.
- Business Process Outsourcing & Consulting company CBIZ (NYSE: CBZ) jumped 3%. Is now the time to buy CBIZ? Access our full analysis report here, it’s free.
- Data & Business Process Services company Equifax (NYSE: EFX) jumped 4.3%. Is now the time to buy Equifax? Access our full analysis report here, it’s free.
Zooming In On Equifax (EFX)
Equifax’s shares are not very volatile and have only had 9 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 21 days ago when the stock gained 3.5% on the news that a new trade agreement between the United States and Japan spurred a broad market rally. The positive sentiment swept across markets after it was announced the U.S. and Japan had reached a new trade deal. The agreement included a 15% tariff on Japanese goods imported into the U.S. and a commitment from Japan to invest $550 billion in the U.S. and open its markets to American cars and agricultural products. This development boosted investor confidence and contributed to a widespread rally, lifting stocks across many sectors. The Dow Jones Industrial Average and the S&P 500 both posted gains, creating a favorable environment that likely benefited individual stocks.
Equifax is up 0.9% since the beginning of the year, but at $253.30 per share, it is still trading 17.5% below its 52-week high of $307.13 from August 2024. Investors who bought $1,000 worth of Equifax’s shares 5 years ago would now be looking at an investment worth $1,519.
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