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 Facilities company Sphere Entertainment (NYSE: SPHR) jumped 2.7%. Is now the time to buy Sphere Entertainment? Access our full analysis report here, it’s free for active Edge members.
• Casino Operator company Red Rock Resorts (NASDAQ: RRR) jumped 2.8%. Is now the time to buy Red Rock Resorts? Access our full analysis report here, it’s free for active Edge members.
• Footwear company Nike (NYSE: NKE) jumped 2.7%. Is now the time to buy Nike? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Red Rock Resorts (RRR)

Red Rock Resorts’s shares are somewhat volatile and have had 12 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 biggest move we wrote about over the last year was 4 months ago when the stock gained 6% on the news that the company reported blowout second-quarter financial results that significantly beat analyst expectations. The casino and resort operator announced second-quarter earnings and revenue that significantly surpassed analyst expectations. Revenue increased 8.2% year-over-year to $526.3 million, while net income surged 55.1% to $108.3 million. This translated to quarterly earnings of $0.95 per share, blowing past the consensus estimate of $0.40. Company management attributed the “exceptional” quarter to its Las Vegas operations, which posted the highest quarterly net revenue and adjusted EBITDA in the company's history. The strong performance prompted a positive reaction from Wall Street, with several analysts, including those from Truist Securities and JMP Securities, raising their price targets on the stock.

Red Rock Resorts is up 24.8% since the beginning of the year, but at $55.79 per share, it is still trading 11.4% below its 52-week high of $62.97 from August 2025. Investors who bought $1,000 worth of Red Rock Resorts’s shares 5 years ago would now be looking at an investment worth $2,570.

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