What Happened?
A number of stocks jumped in the afternoon session after investors scooped up equities, shaking off the initial concerns inferred from the Fed's dot plot, with tech stocks leading the charge.
As a reminder, the Federal Reserve cut its benchmark interest rate by 25 basis points yesterday and signaled that more reductions could come before year-end and beyond. Initially when the cut was announced and Fed Chair Powell held his press conference, there was a pullback in the market as the Fed's "dot plot" revealed that only one cut was likely for 2026. This was below the three cuts that had been priced into the markets. This was the first interest rate cut of 2025, a move investors had widely anticipated. In response to the decision, stocks rose significantly, positioning major indexes like the S&P 500 and Nasdaq to open at record levels.
The Fed's decision was influenced by signs of a weakening labor market. Lower interest rates are generally seen as positive for stocks because they reduce borrowing costs for businesses and make fixed-income investments like bonds less attractive by comparison, driving capital into the equity market. While Fed Chair Powell noted the path forward has risks, the prospect of looser monetary policy has fueled optimism on Wall Street.
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:
- General Industrial Machinery company Luxfer (NYSE:LXFR) jumped 3.7%. Is now the time to buy Luxfer? Access our full analysis report here, it’s free.
- Heavy Transportation Equipment company Blue Bird (NASDAQ:BLBD) jumped 3.1%. Is now the time to buy Blue Bird? Access our full analysis report here, it’s free.
- Specialty Equipment Distributors company Richardson Electronics (NASDAQ:RELL) jumped 3.4%. Is now the time to buy Richardson Electronics? Access our full analysis report here, it’s free.
- HVAC and Water Systems company CSW (NASDAQ:CSW) jumped 3.1%. Is now the time to buy CSW? Access our full analysis report here, it’s free.
- Gas and Liquid Handling company Ingersoll Rand (NYSE:IR) jumped 3.2%. Is now the time to buy Ingersoll Rand? Access our full analysis report here, it’s free.
Zooming In On Luxfer (LXFR)
Luxfer’s shares are somewhat volatile and have had 10 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 23 days ago when the stock gained 3.7% on the news that the company's Gas Cylinders division entered a strategic partnership with Reynolds Logistics for the HyHaul project, a major hydrogen mobility initiative in the UK.
As part of the collaboration, Reynolds Logistics has placed an initial order for four of Luxfer's 40ft Multiple Element Gas Containers (MEGCs), valued at approximately £3 million. These containers are crucial for supporting the deployment of zero-emission hydrogen refueling infrastructure and logistics. The partnership also includes plans for phased expansion, signaling potential for future orders and a strengthening of Luxfer's position in the growing hydrogen energy sector.
Luxfer is up 13.3% since the beginning of the year, and at $14.77 per share, it is trading close to its 52-week high of $14.99 from November 2024. Investors who bought $1,000 worth of Luxfer’s shares 5 years ago would now be looking at an investment worth $1,110.
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