What Happened?
A number of stocks jumped in the afternoon session after Federal Reserve Governor Christopher Waller signaled support for holding interest rates steady amid emerging signs of disinflation. During a Reuters NEXT Newsmaker interview, Governor Waller stated that if the positive economic trends seen over the last few months continue in the data due over the next two weeks, he would be inclined to support holding the federal funds target rate at its current setting. Waller pointed out that the three-month annualized inflation rate as measured by the Personal Consumption Expenditures (PCE) price index has dropped from 4.76% in February to 3.05% currently, representing an encouraging downward trajectory. However, Waller warned that considerable uncertainty remains regarding how global conflicts, trade policy, and artificial intelligence will affect prices, according to Bloomberg. He cautioned that if upcoming August data shows this disinflationary progress has been fleeting, a rate hike may still be appropriate when the FOMC meets on September 15 and 16. Following Waller’s comments, market-implied odds for a September rate hike dropped to 48.4%, down 15 percentage points from the prior day, according to the CME Group’s FedWatch gauge cited by CNBC.
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:
- Personal Loan company SoFi (NASDAQ: SOFI) jumped 4.7%. Is now the time to buy SoFi? Access our full analysis report here, it’s free.
- Custody Bank company WisdomTree (NYSE: WT) jumped 3.9%. Is now the time to buy WisdomTree? Access our full analysis report here, it’s free.
- Custody Bank company Ridgepost Capital (NYSE: RPC) jumped 2.3%. Is now the time to buy Ridgepost Capital? Access our full analysis report here, it’s free.
- Asset Management company Ares (NYSE: ARES) jumped 3.1%. Is now the time to buy Ares? Access our full analysis report here, it’s free.
- Financial Exchanges & Data company S&P Global (NYSE: SPGI) jumped 4%. Is now the time to buy S&P Global? Access our full analysis report here, it’s free.
Zooming In On SoFi (SOFI)
SoFi’s shares are extremely volatile and have had 35 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 dropped 13.5% on the news that its first-quarter earnings results were overshadowed by a disappointing financial outlook for the second quarter. The digital financial services company reported better-than-expected first-quarter revenue of $1.1 billion, a 42.8% increase year-over-year, and posted an adjusted profit of $0.12 per share, which was in line with analyst expectations. However, investor sentiment soured on the company's guidance for the upcoming second quarter. SoFi projected revenue growth of 30% and an EBITDA margin of 30%, both of which missed Wall Street's forecasts. While the company maintained its full-year revenue outlook, the weaker near-term forecast sparked concerns about its growth trajectory, leading investors to sell off the stock.
SoFi is down 32.7% since the beginning of the year, and at $18.48 per share, it is trading 42.6% below its 52-week high of $32.21 from November 2025. Despite the year-to-date decline, investors who bought $1,000 worth of SoFi’s shares 5 years ago would now be looking at an investment worth $1,219.
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