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:
- Leisure Products company Harley-Davidson (NYSE:HOG) jumped 4%. Is now the time to buy Harley-Davidson? Access our full analysis report here, it’s free for active Edge members.
- Specialized Consumer Services company Mister Car Wash (NASDAQ:MCW) jumped 4.2%. Is now the time to buy Mister Car Wash? Access our full analysis report here, it’s free for active Edge members.
- Home Furnishings company Leggett & Platt (NYSE:LEG) jumped 4.2%. Is now the time to buy Leggett & Platt? Access our full analysis report here, it’s free for active Edge members.
- Travel and Vacation Providers company Hilton (NYSE:HLT) jumped 4%. Is now the time to buy Hilton? Access our full analysis report here, it’s free for active Edge members.
- Leisure Facilities company European Wax Center (NASDAQ:EWCZ) jumped 4.1%. Is now the time to buy European Wax Center? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Mister Car Wash (MCW)
Mister Car Wash’s shares are somewhat volatile and have had 11 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 gained 3.1% as investors continued to pile into value-oriented names amid growing valuation concerns. This shift reflected growing caution over high valuations within the technology and artificial intelligence (AI) spheres. As market participants reassessed risk, they reallocated capital from growth-heavy indices, like the Nasdaq, to companies in areas like industrials and financials, perceived to be more reasonably priced. Contributing to the positive momentum, markets remained hopeful that a prolonged 40-day government shutdown would be over. The U.S. Senate approved a compromise funding package, which was pending a vote in the House. The potential end to the shutdown brought a sense of relief to markets.
Mister Car Wash is down 30.6% since the beginning of the year, and at $5.05 per share, it is trading 40.6% below its 52-week high of $8.49 from February 2025. Investors who bought $1,000 worth of Mister Car Wash’s shares at the IPO in June 2021 would now be looking at an investment worth $248.52.
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