What Happened?
A number of stocks jumped in the afternoon session after investors grew more optimistic about a potential Federal Reserve interest rate cut in December.
The positive sentiment was fueled by comments from New York Fed President John Williams, a voting member of the rate-setting Federal Open Market Committee, who stated the central bank could cut rates "in the near term" without jeopardizing its inflation targets. Following his remarks, market expectations for a rate cut in December shifted significantly. According to the CME FedWatch Tool, the probability of a December rate reduction surged from a 37% chance earlier in the day to 70%. While lower rates can compress bank profit margins, investors often view them as a catalyst for broader economic activity, potentially boosting loan demand and reducing the risk of defaults.
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:
- Personal Loan company Affirm (NASDAQ:AFRM) jumped 3.7%. Is now the time to buy Affirm? Access our full analysis report here, it’s free for active Edge members.
- Personal Loan company Sezzle (NASDAQ:SEZL) jumped 3.7%. Is now the time to buy Sezzle? Access our full analysis report here, it’s free for active Edge members.
- Diversified Financial Services company Euronet Worldwide (NASDAQ:EEFT) jumped 3.8%. Is now the time to buy Euronet Worldwide? Access our full analysis report here, it’s free for active Edge members.
- Personal Loan company OneMain (NYSE:OMF) jumped 3.8%. Is now the time to buy OneMain? Access our full analysis report here, it’s free for active Edge members.
Zooming In On OneMain (OMF)
OneMain’s shares are not very volatile and have only had 8 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 previous big move we wrote about was 21 days ago when the stock gained 5.3% on the news that the company reported favorable third-quarter 2025 results, highlighted by a significant earnings beat and solid revenue growth. The company posted an adjusted profit of $1.90 per share, which was 18.5% above Wall Street's consensus estimates. This strong bottom-line performance was supported by revenue that grew 7.1% year-over-year to $1.24 billion, meeting expectations. Additionally, OneMain's net interest income, a key performance metric for lenders, outperformed forecasts, coming in at $1.07 billion. The results were seen as a solid quarter with key areas of upside, signaling healthy business fundamentals and boosting investor confidence.
OneMain is up 15.9% since the beginning of the year, and at $60.10 per share, it is trading close to its 52-week high of $62.61 from September 2025. Investors who bought $1,000 worth of OneMain’s shares 5 years ago would now be looking at an investment worth $1,552.
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