What Happened?

A number of stocks jumped in the afternoon session after comments from a key Federal Reserve official bolstered hopes for an interest rate cut. 

New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.

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:

• Branded Pharmaceuticals company Pfizer (NYSE: PFE) jumped 2.9%. Is now the time to buy Pfizer? Access our full analysis report here, it’s free for active Edge members.
• Health Insurance Providers company UnitedHealth (NYSE: UNH) jumped 2.6%. Is now the time to buy UnitedHealth? Access our full analysis report here, it’s free for active Edge members.
• Generic Pharmaceuticals company Viatris (NASDAQ: VTRS) jumped 2.9%. Is now the time to buy Viatris? Access our full analysis report here, it’s free for active Edge members.
• Senior Health, Home Health & Hospice company Addus HomeCare (NASDAQ: ADUS) jumped 3%. Is now the time to buy Addus HomeCare? Access our full analysis report here, it’s free for active Edge members.
• Testing & Diagnostics Services company Quest (NYSE: DGX) jumped 2.8%. Is now the time to buy Quest? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Addus HomeCare (ADUS)

Addus HomeCare’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 3 months ago when the stock gained 3.3% on the news that markets continued to rally amid growing speculation of an impending interest rate cut by the Federal Reserve. 

Following a favorable Consumer Price Index (CPI) report, investors are increasingly betting on a rate reduction next month, a sentiment amplified by U.S. Treasury Secretary Scott Bessent's call for a significant cut. This has fueled a 'risk-on' environment across Wall Street. Lower interest rates are typically beneficial for growth-oriented sectors like healthcare, as they reduce the cost of borrowing for research and innovation and increase the present value of future earnings.

Addus HomeCare is down 8.7% since the beginning of the year, and at $113.40 per share, it is trading 16.6% below its 52-week high of $135.92 from January 2025. Investors who bought $1,000 worth of Addus HomeCare’s shares 5 years ago would now be looking at an investment worth $1,167.

Microsoft, Alphabet, Coca-Cola, Monster Beverage—all began as under-the-radar growth stories riding a massive trend. We’ve identified the next one: a profitable AI semiconductor play Wall Street is still overlooking.Go here for access to our full report.