What Happened?
A number of stocks jumped in the afternoon session after comments from a key Federal Reserve official boosted investor optimism for a potential interest rate cut.
New York Federal Reserve President John Williams, a voting member of the rate-setting committee, suggested he sees room for "further policy easing," which sent a strong signal to the markets. Following his remarks, the probability of a December rate cut, as measured by the CME FedWatch Tool, surged from 39% to 71%. Lower interest rates can stimulate the economy by making borrowing cheaper for both consumers and businesses, which often translates to increased consumer spending. This prospect is outweighing recent reports of lower consumer confidence, as investors bet that a more accommodative Fed policy will support retailers through the holiday season.
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:
- Apparel Retailer company Abercrombie and Fitch (NYSE: ANF) jumped 2.9%. Is now the time to buy Abercrombie and Fitch? Access our full analysis report here, it’s free for active Edge members.
- Discount Retailer company Ollie's (NASDAQ: OLLI) jumped 3%. Is now the time to buy Ollie's? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Ollie's (OLLI)
Ollie’s shares are somewhat volatile and have had 13 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 18 days ago when the stock gained 3% on the news that analysts at JPMorgan and KeyBanc raised their price targets for the company's stock. JPMorgan increased its price target on the company's shares to $160 from $159, while KeyBanc lifted its target to $154 from $145. These upward revisions pointed to a more optimistic outlook for the company's future performance among market watchers. Adding to the positive sentiment, financial news personality Jim Cramer also expressed strong support for the stock, stating he was a member of 'Ollie's army' and would not doubt the company.
Ollie's is up 14.8% since the beginning of the year, but at $124.32 per share, it is still trading 11.7% below its 52-week high of $140.80 from August 2025. Investors who bought $1,000 worth of Ollie’s shares 5 years ago would now be looking at an investment worth $1,346.
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