What Happened?
A number of stocks jumped in the afternoon session after an unexpected drop in the Producer Price Index (PPI) for August signaled easing inflation and raised expectations for a potential Federal Reserve interest rate cut.
The U.S. Bureau of Labor Statistics reported that the PPI, which measures wholesale prices, edged down 0.1% last month, contrary to analyst expectations for a 0.3% rise. This data gives the Federal Reserve more flexibility to consider lowering interest rates to stimulate the economy.
According to the CME FedWatch Tool, the probability of a quarter-point rate cut at the next Fed meeting has surged to 90%. Lower interest rates typically benefit the industrial sector by reducing borrowing costs for new projects and expansion, potentially leading to increased economic activity and demand for industrial goods.
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:
- Renewable Energy company American Superconductor (NASDAQ: AMSC) jumped 4.8%. Is now the time to buy American Superconductor? Access our full analysis report here, it’s free.
- Construction and Maintenance Services company Orion (NYSE: ORN) jumped 3.1%. Is now the time to buy Orion? Access our full analysis report here, it’s free.
- Heavy Transportation Equipment company Commercial Vehicle Group (NASDAQ: CVGI) jumped 2.7%. Is now the time to buy Commercial Vehicle Group? Access our full analysis report here, it’s free.
- Electronic Components company Corning (NYSE: GLW) jumped 3%. Is now the time to buy Corning? Access our full analysis report here, it’s free.
- Custom Parts Manufacturing company 3D Systems (NYSE: DDD) jumped 3.3%. Is now the time to buy 3D Systems? Access our full analysis report here, it’s free.
Zooming In On American Superconductor (AMSC)
American Superconductor’s shares are extremely volatile and have had 66 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 15 days ago when the stock gained 5% after positive analyst sentiment regarding the company's growth prospects. According to recent data, 11 analysts covering the stock have established a consensus 'Buy' rating. The positive outlook is supported by a detailed breakdown where 45% of analysts recommend a 'Strong Buy' and another 18% recommend a 'Buy.' This sentiment is echoed by headlines suggesting 'Strong Growth Ahead' for the company. While 27% of analysts suggest holding the stock and 9% advise selling, the overall consensus points towards confidence in the company's future performance.
American Superconductor is up 104% since the beginning of the year, and at $52.09 per share, it is trading close to its 52-week high of $56.85 from July 2025. Investors who bought $1,000 worth of American Superconductor’s shares 5 years ago would now be looking at an investment worth $4,396.
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