What Happened?
A number of stocks jumped in the afternoon session after investors continued to pile into value-oriented names amid growing valuation concerns.
This shift reflected growing caution over high valuations within the technology and artificial intelligence (AI) spheres. As market participants reassessed risk, they reallocated capital from growth-heavy indices, like the Nasdaq, to companies in areas like industrials and financials, perceived to be more reasonably priced. Contributing to the positive momentum, markets remained hopeful that a prolonged 40-day government shutdown would be over. The U.S. Senate approved a compromise funding package, which was pending a vote in the House. The potential end to the shutdown brought a sense of relief to markets.
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:
- Asset Management company TPG (NASDAQ:TPG) jumped 2.7%. Is now the time to buy TPG? Access our full analysis report here, it’s free for active Edge members.
- Investment Banking & Brokerage company Goldman Sachs (NYSE:GS) jumped 3%. Is now the time to buy Goldman Sachs? Access our full analysis report here, it’s free for active Edge members.
- Investment Banking & Brokerage company Evercore (NYSE:EVR) jumped 3%. Is now the time to buy Evercore? Access our full analysis report here, it’s free for active Edge members.
- Student Loan company Sallie Mae (NASDAQ:SLM) jumped 4.9%. Is now the time to buy Sallie Mae? Access our full analysis report here, it’s free for active Edge members.
- Custody Bank company Invesco (NYSE:IVZ) jumped 3.2%. Is now the time to buy Invesco? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Sallie Mae (SLM)
Sallie Mae’s shares are not very volatile and have only had 6 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 19 days ago when the stock gained 4.8% on the news that a cooler-than-expected inflation report boosted investor confidence and fueled expectations for a Federal Reserve interest rate cut. The positive inflation data, showing the softest increase in the core Consumer Price Index (CPI) since May, has led investors to believe the Federal Reserve will soon lower borrowing costs. Markets widely anticipating a 25 basis point rate cut at the next Fed meeting. This optimism was further supported by strong economic growth indicators, with both the services and manufacturing sectors showing accelerated activity according to the S&P Global Flash Purchasing Managers' Index (PMI) data. The combination of easing price pressures and a thriving economy overshadowed concerns about an ongoing government shutdown, sending major indices like the S&P 500 to new record highs.
Sallie Mae is up 3.3% since the beginning of the year, but at $28.25 per share, it is still trading 17.9% below its 52-week high of $34.40 from July 2025. Investors who bought $1,000 worth of Sallie Mae’s shares 5 years ago would now be looking at an investment worth $2,670.
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