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:

• Building Materials company Resideo (NYSE: REZI) jumped 4.5%. Is now the time to buy Resideo? Access our full analysis report here, it’s free.
• Construction and Maintenance Services company MYR Group (NASDAQ: MYRG) jumped 4.4%. Is now the time to buy MYR Group? Access our full analysis report here, it’s free.
• Defense Contractors company Mercury Systems (NASDAQ: MRCY) jumped 4.2%. Is now the time to buy Mercury Systems? Access our full analysis report here, it’s free.
• Construction and Maintenance Services company Tutor Perini (NYSE: TPC) jumped 4.7%. Is now the time to buy Tutor Perini? Access our full analysis report here, it’s free.
• Gas and Liquid Handling company Helios (NYSE: HLIO) jumped 4.1%. Is now the time to buy Helios? Access our full analysis report here, it’s free.

Zooming In On Tutor Perini (TPC)

Tutor Perini’s shares are very volatile and have had 27 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 8 days ago when the stock gained 2.7% on the news that the latest Producer Price Index (PPI) data showed an unexpected decline, signaling easing inflation. 

The U.S. Labor Department reported that producer prices, which measure inflation before it reaches consumers, fell by 0.1% in August. This drop was unexpected by economists and suggests that costs within the supply chain are decreasing. For industrial companies, this can be a significant positive, as it may lead to lower prices for raw materials and wholesale goods. Reduced input costs can directly improve profit margins, which is a key reason for the positive investor sentiment. The data showed core producer prices, which exclude volatile food and energy, also fell by 0.1%.

Tutor Perini is up 174% since the beginning of the year, Investors who bought $1,000 worth of Tutor Perini’s shares 5 years ago would now be looking at an investment worth $5,256.

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