What Happened?
A number of stocks jumped in the morning 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 the previous day 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:
- HVAC and Water Systems company AAON (NASDAQ: AAON) jumped 5.7%. Is now the time to buy AAON? Access our full analysis report here, it’s free.
- Custom Parts Manufacturing company 3D Systems (NYSE: DDD) jumped 5.8%. Is now the time to buy 3D Systems? Access our full analysis report here, it’s free.
- Construction and Maintenance Services company Comfort Systems (NYSE: FIX) jumped 3.6%. Is now the time to buy Comfort Systems? Access our full analysis report here, it’s free.
- Engineering and Design Services company Sterling (NASDAQ: STRL) jumped 5.5%. Is now the time to buy Sterling? Access our full analysis report here, it’s free.
- Specialty Equipment Distributors company Custom Truck One Source (NYSE: CTOS) jumped 4.7%. Is now the time to buy Custom Truck One Source? Access our full analysis report here, it’s free.
Zooming In On 3D Systems (DDD)
3D Systems’s shares are extremely volatile and have had 71 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 3 days ago when the stock gained 2.9% on the news that the stock extended the positive momentum as its joint venture, the National Additive Manufacturing and Innovation Company (NAMI), announced a partnership with aerospace giant Lockheed Martin.
The collaboration will focus on qualifying aluminum 3D-printed components for use in the aerospace and defense sectors within the Kingdom of Saudi Arabia. NAMI is a strategic joint venture between 3D Systems and DUSSUR, a Saudi Arabian public investment fund. This partnership with a major player like Lockheed Martin signals a significant step into the high-value aerospace market, potentially opening up new revenue streams and validating the company's technology for critical industrial applications.
3D Systems is down 25.3% since the beginning of the year, and at $2.40 per share, it is trading 49.2% below its 52-week high of $4.72 from February 2025. Investors who bought $1,000 worth of 3D Systems’s shares 5 years ago would now be looking at an investment worth $449.25.
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