What Happened?
A number of stocks fell in the afternoon session after markets faded the Nvidia rally in the morning session, as investors remained uncertain about future rate cuts.
While the trading day began with significant enthusiasm, pushing the Dow Jones Industrial Average up more than 700 points and the Nasdaq Composite up 2.6%, momentum quickly evaporated as the session wore on. The primary catalyst for this sharp reversal was a stronger-than-expected jobs report, which reduced the implied odds of a December interest rate cut to less than 40%. This macroeconomic anxiety overshadowed stellar corporate performance. Nvidia initially surged 5% on blockbuster earnings and CEO Jensen Huang's bullish outlook on "off the charts" demand for Blackwell chips. However, the stock eventually turned negative, acting as a heavy weight that dragged the broader indices into the red. The sell-off partly reflects a deepening caution regarding high-flying tech valuations in a "higher-for-longer" rate environment. Consequently, investors appeared to rotate capital away from volatile growth sectors and toward defensive staples, evidenced by Walmart's 6% gain following its own earnings beat. Ultimately, the market could not sustain the morning's euphoria, as traders prioritized rate realities over AI potential.
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:
- Electrical Systems company Atkore (NYSE:ATKR) fell 14.3%. Is now the time to buy Atkore? Access our full analysis report here, it’s free for active Edge members.
- Renewable Energy company Shoals (NASDAQ:SHLS) fell 5.6%. Is now the time to buy Shoals? Access our full analysis report here, it’s free for active Edge members.
- Construction and Maintenance Services company Comfort Systems (NYSE:FIX) fell 4.2%. Is now the time to buy Comfort Systems? Access our full analysis report here, it’s free for active Edge members.
- Renewable Energy company Array (NASDAQ:ARRY) fell 5%. Is now the time to buy Array? Access our full analysis report here, it’s free for active Edge members.
- Defense Contractors company Kratos (NASDAQ:KTOS) fell 3.9%. Is now the time to buy Kratos? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Atkore (ATKR)
Atkore’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. But moves this big are rare even for Atkore and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock dropped 27.1% on the news that the company reported a significant drop in quarterly profit and announced the planned retirement of its
CEO, Bill Waltz. Atkore disclosed that its net sales fell 10.6% compared to the same period last year, landing at $735 million. The company attributed this decline primarily to lower average selling prices for its products. Profitability took a substantial hit, as net income plummeted by over 65% to $43.0 million. This resulted in an earnings per share (EPS) of $1.25, which fell short of analyst forecasts. The news of the CEO's departure added to investor concerns, creating uncertainty about the company's future leadership.
Atkore is down 28.8% since the beginning of the year, and at $57.95 per share, it is trading 39% below its 52-week high of $94.95 from November 2024. Investors who bought $1,000 worth of Atkore’s shares 5 years ago would now be looking at an investment worth $1,704.
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