What Happened?
A number of stocks fell in the afternoon session after Federal Reserve Chair Jerome Powell delivered cautious remarks on the economy, spooking investors and pulling indexes back from record highs.
Speaking for the first time since the central bank's recent interest rate cut, Powell described the current economic landscape as a "challenging situation." He highlighted the difficult task of balancing a weakening labor market against persistent inflation risks. Powell also commented that equity prices appeared "fairly highly valued," adding to investor concerns and prompting profit-taking. The cautious tone from the Fed chair drove declines across major indexes, including the S&P 500 and the tech-heavy Nasdaq, as the market reassessed the path forward for monetary policy.
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:
- Electronic Components & Manufacturing company Rogers (NYSE: ROG) fell 3.5%. Is now the time to buy Rogers? Access our full analysis report here, it’s free.
- Electronic Components & Manufacturing company Coherent (NYSE: COHR) fell 5.6%. Is now the time to buy Coherent? Access our full analysis report here, it’s free.
- Terrestrial Telecommunication Services company Lumen (NYSE: LUMN) fell 5.8%. Is now the time to buy Lumen? Access our full analysis report here, it’s free.
- Hardware & Infrastructure company Xerox (NASDAQ: XRX) fell 3.7%. Is now the time to buy Xerox? Access our full analysis report here, it’s free.
- Advertising & Marketing Services company Magnite (NASDAQ: MGNI) fell 2.5%. Is now the time to buy Magnite? Access our full analysis report here, it’s free.
Zooming In On Lumen (LUMN)
Lumen’s shares are extremely volatile and have had 48 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not 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 12% on the news that the company announced significant progress on a multi-billion-dollar network expansion to meet the soaring demand from Artificial Intelligence (AI). Lumen detailed its plans to add 34 million new intercity fiber miles by the end of 2028, which would bring its total to 47 million. This move represented more than doubling the size of the company's U.S. network infrastructure. The company stated that it had already deployed over 2.2 million new fiber miles in 2025. An executive noted that AI was fueling a surge in network demand unlike any seen before and that Lumen was building the backbone to meet it. This major investment positioned the company to capture growth from enterprises needing the network scale and speed to power their AI workloads, sparking investor optimism.
Lumen is up 3.6% since the beginning of the year, but at $5.82 per share, it is still trading 42.5% below its 52-week high of $10.12 from November 2024. Investors who bought $1,000 worth of Lumen’s shares 5 years ago would now be looking at an investment worth $578.19.
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