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A number of stocks jumped in the afternoon session after comments from a key Federal Reserve official bolstered hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.
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:
Somnigroup’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be 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 11.1% on the news that the company reported strong third-quarter financial results that beat expectations and raised its full-year guidance.
The bedding manufacturer announced that its revenue grew by 63.3% year-over-year to $2.12 billion, surpassing analyst forecasts of $2.06 billion. The company's adjusted earnings per share of $0.95 also topped Wall Street's expectations of $0.86. This strong performance was driven by significant growth in its direct-to-consumer sales, which offset a miss in its wholesale segment. Adding to the positive news, Somnigroup increased its full-year adjusted EPS guidance to a midpoint of $2.68. The comprehensive earnings beat and improved outlook fueled investor confidence in the company's direction.
Somnigroup is up 56.5% since the beginning of the year, and at $87.33 per share, it is trading close to its 52-week high of $93.50 from November 2025. Investors who bought $1,000 worth of Somnigroup’s shares 5 years ago would now be looking at an investment worth $3,405.
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