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:

• General Industrial Machinery company Illinois Tool Works (NYSE: ITW) jumped 3.1%. Is now the time to buy Illinois Tool Works? Access our full analysis report here, it’s free.
• Engineered Components and Systems company NN (NASDAQ: NNBR) jumped 4.3%. Is now the time to buy NN? Access our full analysis report here, it’s free.
• Electrical Systems company Verra Mobility (NASDAQ: VRRM) jumped 3.2%. Is now the time to buy Verra Mobility? Access our full analysis report here, it’s free.
• Thrifts & Mortgage Finance company Annaly Capital Management (NYSE: NLY) jumped 3.2%. Is now the time to buy Annaly Capital Management? Access our full analysis report here, it’s free.
• Memory Semiconductors company Seagate Technology (NASDAQ: STX) jumped 3.3%. Is now the time to buy Seagate Technology? Access our full analysis report here, it’s free.

Zooming In On NN (NNBR)

NN’s shares are extremely volatile and have had 58 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 8 days ago when the stock dropped 3.2% on the news that an unexpectedly sharp rise in wholesale inflation fueled concerns about rising costs and their impact on corporate profits. The primary catalyst was the July 2025 Producer Price Index (PPI), a measure of inflation at the wholesale level, which jumped 0.9% against forecasts of a 0.2% rise. This represents the most significant monthly increase in over three years, pointing to mounting cost pressures for manufacturers, with tariffs cited as a key factor. This data complicates the Federal Reserve's upcoming interest rate decisions, as persistent inflation may prevent rate cuts, creating a headwind for cyclical sectors like Industrials.

NN is down 24.1% since the beginning of the year, and at $2.40 per share, it is trading 43.5% below its 52-week high of $4.25 from December 2024. Investors who bought $1,000 worth of NN’s shares 5 years ago would now be looking at an investment worth $437.96.

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