What Happened?

A number of stocks jumped in the afternoon session after comments from a key Federal Reserve official hinted at a potential interest rate cut in December. John Williams, president of the Federal Reserve Bank of New York, signaled he was open to lowering the fed funds rate—the key interest rate that banks charge each other for overnight loans—to support the job market. 

Speaking at an event, Williams stated that he sees “room for a further adjustment” for interest rates, which immediately shifted market expectations. Following his remarks, the perceived likelihood of an interest rate cut at the Federal Reserve's December meeting flipped from unlikely to more likely than not. The prospect of lower borrowing costs sent a wave of optimism through the markets, leading to a rally in major indices like the S&P 500, Dow Jones Industrial Average, and the Nasdaq Composite.

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:

• Advertising & Marketing Services company Interpublic Group (NYSE: IPG) jumped 4.7%. Is now the time to buy Interpublic Group? Access our full analysis report here, it’s free for active Edge members.
• Advertising & Marketing Services company Omnicom Group (NYSE: OMC) jumped 4.7%. Is now the time to buy Omnicom Group? Access our full analysis report here, it’s free for active Edge members.
• Data & Business Process Services company TransUnion (NYSE: TRU) jumped 4.6%. Is now the time to buy TransUnion? Access our full analysis report here, it’s free for active Edge members.
• IT Services & Consulting company Accenture (NYSE: ACN) jumped 5%. Is now the time to buy Accenture? Access our full analysis report here, it’s free for active Edge members.
• Electronic Components & Manufacturing company CTS (NYSE: CTS) jumped 4.2%. Is now the time to buy CTS? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Accenture (ACN)

Accenture’s shares are not very volatile and have only had 6 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 biggest move we wrote about over the last year was 5 months ago when the stock dropped 7% on the news that the company reported weak first quarter 2025 (fiscal Q3) results: bookings in the quarter (a leading indicator of revenue) missed and EPS guidance was just in line. There were likely concerns about the sales pipeline as the number of new bookings (leading revenue indicator) fell 7%, compared to the more modest decline in the previous quarter. On the other hand, Accenture's revenue beat expectations. Revenue guidance for next quarter also topped Wall Street's estimates. Despite raising its full-year guidance for both revenue and EPS, the market's focus remained on the deceleration in bookings, suggesting concerns about the company's near-term growth prospects and the competitive landscape for IT services.

Accenture is down 27.8% since the beginning of the year, and at $251.75 per share, it is trading 36.8% below its 52-week high of $398.25 from February 2025. Investors who bought $1,000 worth of Accenture’s shares 5 years ago would now be looking at an investment worth $1,023.

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