What Happened?

A number of stocks jumped in the afternoon session after the Federal Reserve lowered its benchmark interest rate by a quarter-percentage point, signaling a more accommodative monetary policy. 

This dovish action, combined with highly accommodating signals from Chair Jerome Powell and the Federal Open Market Committee (FOMC), sent the Dow Jones Industrial Average and S&P 500 surging. The market's bullish reaction was rooted in several key takeaways from the Fed's announcement. Most significantly, the central bank confirmed it would begin expanding its balance sheet by buying short-term bonds, a move that injects critical liquidity and lowers short-term Treasury yields. Furthermore, the Fed signaled a shift in priority by removing language that described the labor market as "remaining low," suggesting it would be more focused on supporting economic growth. While the Fed's official forecast projected only one cut for the next year, traders immediately priced in the expectation of more aggressive easing, banking on at least two rate reductions. This widespread anticipation of sustained, low borrowing costs and the virtual certainty that rate hikes would be off the table boosted corporate valuations and created powerful momentum for the equity market rally.

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:

• Construction and Maintenance Services company Concrete Pumping (NASDAQ: BBCP) jumped 4.8%. Is now the time to buy Concrete Pumping? Access our full analysis report here, it’s free for active Edge members.
• Heavy Transportation Equipment company PACCAR (NASDAQ: PCAR) jumped 4.6%. Is now the time to buy PACCAR? Access our full analysis report here, it’s free for active Edge members.
• Heavy Transportation Equipment company Cummins (NYSE: CMI) jumped 4.8%. Is now the time to buy Cummins? Access our full analysis report here, it’s free for active Edge members.
• Professional Tools and Equipment company ESAB (NYSE: ESAB) jumped 4.6%. Is now the time to buy ESAB? Access our full analysis report here, it’s free for active Edge members.
• Heavy Transportation Equipment company Allison Transmission (NYSE: ALSN) jumped 4.7%. Is now the time to buy Allison Transmission? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Concrete Pumping (BBCP)

Concrete Pumping’s shares are very volatile and have had 23 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 9 months ago when the stock dropped 17.4% on the news that the company reported weak fourth-quarter 2024 (fiscal Q1 2025) results: Its full-year EBITDA guidance missed significantly and its sales, adjusted EBITDA, and EPS fell short of Wall Street's estimates. What jumped at us was the 11.5% year-on-year sales decline, primarily due to a slowdown in commercial construction and severe weather disruptions in key U.S. regions. The U.S. concrete pumping segment was hit hardest, with revenue falling 14.6%, while the U.K. segment also struggled, posting a 16.7% decline. Overall, this was a challenging quarter.

Concrete Pumping is up 2.8% since the beginning of the year, but at $6.82 per share, it is still trading 24.6% below its 52-week high of $9.04 from January 2025. Investors who bought $1,000 worth of Concrete Pumping’s shares 5 years ago would now be looking at an investment worth $1,993.

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