What Happened?

A number of stocks jumped in the afternoon session after the Consumer Price Index (CPI) report bolstered expectations for a Federal Reserve interest rate cut despite showing persistent inflation. 

The August CPI data, a key measure of inflation, showed prices rose 2.9% annually, in line with expectations. While inflation remains above the Federal Reserve's 2% target, investors were focusing on other signs of a cooling economy, particularly a weakening labor market. As a result, the market widely anticipated that the Fed would cut interest rates at its September meeting to support the economy. Investors priced in multiple rate cuts by year-end, which boosted market sentiment and sent Treasury yields lower.

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:

• IT Services & Consulting company Grid Dynamics (NASDAQ: GDYN) jumped 3.5%. Is now the time to buy Grid Dynamics? Access our full analysis report here, it’s free.
• Business Process Outsourcing & Consulting company Huron (NASDAQ: HURN) jumped 3.6%. Is now the time to buy Huron? Access our full analysis report here, it’s free.
• Advertising & Marketing Services company Ibotta (NYSE: IBTA) jumped 4.2%. Is now the time to buy Ibotta? Access our full analysis report here, it’s free.
• Digital Media & Content Platforms company Getty Images (NYSE: GETY) jumped 4.3%. Is now the time to buy Getty Images? Access our full analysis report here, it’s free.
• Traditional Media & Publishing company Sinclair (NASDAQ: SBGI) jumped 3.6%. Is now the time to buy Sinclair? Access our full analysis report here, it’s free.

Zooming In On Getty Images (GETY)

Getty Images’s shares are extremely volatile and have had 44 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 9 days ago when the stock dropped 2.7% on the news that the major indices continued to retreat (Nasdaq -1.5%, S&P 500 -1.2%) amid profit-taking and renewed concerns about tariffs. Investors reacted to a federal court ruling that most of President Trump's global tariffs were illegal, raising uncertainty over trade policy and the fiscal impact of potential refunds. Rising Treasury yields added to the pressure, with the 10-year climbing above 4.2% and the 30-year nearing 5%, intensifying worries about stretched equity valuations. September's historically weak track record for stocks further dampened sentiment, leaving traders cautious ahead of the jobs report later in the week and the Federal Reserve's upcoming rate decision.

Getty Images is down 7.1% since the beginning of the year, and at $1.96 per share, it is trading 55.6% below its 52-week high of $4.41 from November 2024. Investors who bought $1,000 worth of Getty Images’s shares 5 years ago would now be looking at an investment worth $194.06.

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