What Happened?

A number of stocks jumped in the afternoon session after the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.

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:

• IT Distribution & Solutions company Ingram Micro (NYSE: INGM) jumped 4.8%. Is now the time to buy Ingram Micro? Access our full analysis report here, it’s free.
• Professional Staffing & HR Solutions company Kforce (NYSE: KFRC) jumped 5.9%. Is now the time to buy Kforce? Access our full analysis report here, it’s free.
• IT Distribution & Solutions company ScanSource (NASDAQ: SCSC) jumped 12.6%. Is now the time to buy ScanSource? Access our full analysis report here, it’s free.
• Traditional Media & Publishing company EchoStar (NASDAQ: SATS) jumped 6.8%. Is now the time to buy EchoStar? Access our full analysis report here, it’s free.
• Data & Business Process Services company TransUnion (NYSE: TRU) jumped 5%. Is now the time to buy TransUnion? Access our full analysis report here, it’s free.

Zooming In On ScanSource (SCSC)

ScanSource’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. Moves this big are rare for ScanSource and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 9 days ago when the stock gained 4.7% on the news that stocks continued to rally as investor optimism grew for a potential Federal Reserve interest rate cut in September. This optimism was largely fueled by a recent consumer price index report that showed inflation easing, along with public comments from Treasury Secretary Scott Bessent advocating for a significant 50-basis-point rate cut. The prospect of lower borrowing costs tends to boost rate-sensitive sectors like Business Services, as it can encourage companies to increase spending on consulting, IT projects, and staffing.

ScanSource is down 5.4% since the beginning of the year, and at $44.50 per share, it is trading 16.2% below its 52-week high of $53.11 from December 2024. Investors who bought $1,000 worth of ScanSource’s shares 5 years ago would now be looking at an investment worth $1,747.

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