What Happened?
A number of stocks jumped in the afternoon session after a key inflation data aligned with forecasts, bolstering hopes for continued interest rate cuts from the Federal Reserve.
The Personal Consumption Expenditures (PCE) price index, the central bank's preferred gauge of inflation, showed a slight year-over-year increase in August but did not surprise economists. This report was met with relief on Wall Street, as it suggests inflationary pressures remain contained, giving the Federal Reserve more leeway to continue its monetary easing policy. Investors interpreted the news as a positive sign that the Fed can support the economy without risking runaway inflation. The positive sentiment helped the major indices claw back some of the losses from a recent three-day slide, with stocks rising across various sectors.
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:
- Aerospace company Hexcel (NYSE: HXL) jumped 3.8%. Is now the time to buy Hexcel? Access our full analysis report here, it’s free.
- Automobile Manufacturing company Ford (NYSE: F) jumped 3.4%. Is now the time to buy Ford? Access our full analysis report here, it’s free.
- Building Materials company Tecnoglass (NYSE: TGLS) jumped 3.1%. Is now the time to buy Tecnoglass? Access our full analysis report here, it’s free.
- Aerospace company AAR (NYSE: AIR) jumped 4.3%. Is now the time to buy AAR? Access our full analysis report here, it’s free.
- Engineered Components and Systems company Worthington (NYSE: WOR) jumped 3.7%. Is now the time to buy Worthington? Access our full analysis report here, it’s free.
Zooming In On AAR (AIR)
AAR’s shares are somewhat volatile and have had 10 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 2 days ago when the stock gained 3.3% on the news that the company reported third-quarter 2025 results that topped Wall Street's expectations for both revenue and profit.
The company announced sales of $739.6 million, an 11.8% increase year-over-year that comfortably beat the consensus estimate of $688.8 million. Its adjusted earnings per share of $1.08 also surpassed the analyst forecast of $0.98 and grew from $0.85 in the same quarter last year. Furthermore, AAR demonstrated improved profitability as its operating margin expanded to 8.8% from 6.6% a year ago. These strong results, which showcased solid growth and increased efficiency, were well-received by investors.
AAR is up 39.1% since the beginning of the year, and at $85.66 per share, has set a new 52-week high. Investors who bought $1,000 worth of AAR’s shares 5 years ago would now be looking at an investment worth $4,313.
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