What Happened?

A number of stocks jumped in the afternoon session after the latest Consumer Price Index (CPI) report came in largely as expected, reinforcing investor hopes for an upcoming Federal Reserve interest rate cut. 

Data from the Bureau of Labor Statistics showed headline inflation for August at a 2.9% annual rate, with core inflation, which excludes volatile food and energy prices, holding steady at 3.1%. While inflation remains above the Federal Reserve's target, Wall Street interpreted the figures as not being high enough to prevent a widely anticipated rate reduction at the central bank's meeting next week. Analysts note that the Fed's focus has shifted toward the risks of a cooling labor market. With this report being the last key data point before the meeting, the market's conviction for a rate cut strengthened, fueling a broad rally that pushed major U.S. stock indexes to record highs.

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:

• Travel and Vacation Providers company Hyatt Hotels (NYSE: H) jumped 2.5%. Is now the time to buy Hyatt Hotels? Access our full analysis report here, it’s free.
• Travel and Vacation Providers company Marriott Vacations (NYSE: VAC) jumped 3.6%. Is now the time to buy Marriott Vacations? Access our full analysis report here, it’s free.
• Travel and Vacation Providers company Travel + Leisure (NYSE: TNL) jumped 3%. Is now the time to buy Travel + Leisure? Access our full analysis report here, it’s free.
• Leisure Facilities company Xponential Fitness (NYSE: XPOF) jumped 3.2%. Is now the time to buy Xponential Fitness? Access our full analysis report here, it’s free.
• Leisure Products company Polaris (NYSE: PII) jumped 2.9%. Is now the time to buy Polaris? Access our full analysis report here, it’s free.

Zooming In On Marriott Vacations (VAC)

Marriott Vacations’s shares are quite volatile and have had 15 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 1.8% 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.

Marriott Vacations is down 9.1% since the beginning of the year, and at $79.45 per share, it is trading 19.9% below its 52-week high of $99.25 from November 2024. Investors who bought $1,000 worth of Marriott Vacations’s shares 5 years ago would now be looking at an investment worth $831.59.

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