What Happened?
A number of stocks jumped in the afternoon session after the latest Consumer Price Index (CPI) report came in softer than anticipated, fueling investor optimism for interest rate cuts by the Federal Reserve.
The U.S. Bureau of Labor Statistics reported that prices rose 0.2% from December to January, below the 0.3% forecast. On an annual basis, inflation moderated to 2.4%, under the expected 2.5%. This cooling trend has significant implications for monetary policy, with investors now increasing bets on multiple rate reductions by the end of the year. The news prompted a rally in both stocks and Treasuries, as lower interest rates typically reduce borrowing costs for companies and can stimulate economic activity. The Russell 2000 index, which consists of smaller companies sensitive to domestic economic conditions and financial costs, saw a particularly strong positive reaction.
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:
- Hardware & Infrastructure company IonQ (NYSE:IONQ) jumped 9.1%. Is now the time to buy IonQ? Access our full analysis report here, it’s free.
- IT Services & Consulting company Kyndryl (NYSE:KD) jumped 7.4%. Is now the time to buy Kyndryl? Access our full analysis report here, it’s free.
- Hardware & Infrastructure company Diebold Nixdorf (NYSE:DBD) jumped 5.5%. Is now the time to buy Diebold Nixdorf? Access our full analysis report here, it’s free.
- Advertising & Marketing Services company Ibotta (NYSE:IBTA) jumped 5.1%. Is now the time to buy Ibotta? Access our full analysis report here, it’s free.
- Government & Technical Consulting company SAIC (NASDAQ:SAIC) jumped 5%. Is now the time to buy SAIC? Access our full analysis report here, it’s free.
Zooming In On IonQ (IONQ)
IonQ’s shares are extremely volatile and have had 90 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 7 days ago when the stock gained 18.1% on the news that the major indices rebounded from a week of heavy selling.
This rally was fueled by a recovery in technology stocks and a significant bounce in Bitcoin, which stabilized after losing over half its value from its October peak. Investor sentiment was also lifted by a surprising improvement in U.S. consumer sentiment and the realization that massive AI-related capital expenditure, such as Amazon's planned $200 billion, directly benefits chipmakers like Nvidia and Broadcom. These "pick-and-shovel" winners jumped as much as 7%, helping the S&P 500 edge back into positive territory for 2026. The highlight of the day was the Dow Jones Industrial Average, which surged and crossed the historic 50,000 threshold for the first time.
IonQ is down 27.6% since the beginning of the year, and at $33.84 per share, it is trading 58.8% below its 52-week high of $82.09 from October 2025. Investors who bought $1,000 worth of IonQ’s shares 5 years ago would now be looking at an investment worth $2,893.
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