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:
- Advertising & Marketing Services company QuinStreet (NASDAQ: QNST) jumped 5.3%. Is now the time to buy QuinStreet? Access our full analysis report here, it’s free.
- Hardware & Infrastructure company Xerox (NASDAQ: XRX) jumped 3.1%. Is now the time to buy Xerox? Access our full analysis report here, it’s free.
- Digital Media & Content Platforms company Ziff Davis (NASDAQ: ZD) jumped 3.8%. Is now the time to buy Ziff Davis? Access our full analysis report here, it’s free.
- Professional Staffing & HR Solutions company ManpowerGroup (NYSE: MAN) jumped 4.2%. Is now the time to buy ManpowerGroup? Access our full analysis report here, it’s free.
- Digital Media & Content Platforms company Getty Images (NYSE: GETY) jumped 10.1%. Is now the time to buy Getty Images? Access our full analysis report here, it’s free.
Zooming In On Getty Images (GETY)
Getty Images’s shares are extremely volatile and have had 42 moves greater than 5% over the last year. But moves this big are rare even for Getty Images and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 12 days ago when the stock dropped 4% on the news that a surprisingly weak U.S. jobs report was released, fueling concerns about a slowing economy. The U.S. economy added only 73,000 jobs, falling significantly short of economists' expectations, while figures for May and June were revised down, erasing 258,000 previously reported jobs. The professional and business services industry itself shed 14,000 jobs. This data points to a cooling labor market, fueling concerns of a slowing economy. A weaker economic outlook often leads to reduced corporate spending on key services like IT consulting and professional staffing, which directly impacts the sector's revenue and growth prospects. The report immediately increased investor expectations of an interest rate cut by the Federal Reserve.
Getty Images is down 13.7% since the beginning of the year, and at $1.82 per share, it is trading 58.7% below its 52-week high of $4.41 from November 2024. Investors who bought $1,000 worth of Getty Images’s shares at the IPO in September 2020 would now be looking at an investment worth $180.27.
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