What Happened?
A number of stocks jumped in the afternoon session after markets continued to rally as investor optimism grew for a potential Federal Reserve interest rate cut in September. This optimism was largely fueled by a recent consumer price index report that showed inflation easing, along with public comments from Treasury Secretary Scott Bessent advocating for a significant 50-basis-point rate cut. The prospect of lower borrowing costs tends to boost rate-sensitive sectors like Business Services, as it can encourage companies to increase spending on consulting, IT projects, and staffing.
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:
- Specialized Technology company Napco (NASDAQ: NSSC) jumped 3.5%. Is now the time to buy Napco? Access our full analysis report here, it’s free.
- Electronic Components & Manufacturing company Rogers (NYSE: ROG) jumped 3.2%. Is now the time to buy Rogers? Access our full analysis report here, it’s free.
- IT Distribution & Solutions company Ingram Micro (NYSE: INGM) jumped 3.7%. Is now the time to buy Ingram Micro? Access our full analysis report here, it’s free.
- Advertising & Marketing Services company Omnicom Group (NYSE: OMC) jumped 3.2%. Is now the time to buy Omnicom Group? Access our full analysis report here, it’s free.
- Government & Technical Consulting company UL Solutions (NYSE: ULS) jumped 3.8%. Is now the time to buy UL Solutions? Access our full analysis report here, it’s free.
Zooming In On UL Solutions (ULS)
UL Solutions’s shares are not very volatile and have only had 3 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 8 days ago when the stock dropped 13.6% on the news that the company reported its second-quarter financial results, which showed a decline in net income and earnings per share despite revenue growth. The company’s revenue increased 6.3% to $776 million, but its net income dropped 8.5% to $97 million. This pushed the diluted earnings per share, a measure of profit per share, down by 10.0% to $0.45. UL Solutions attributed the fall in profit to a significant one-time gain from a business sale in the prior year and a higher income tax rate in the current quarter. Even though the company affirmed its full-year outlook and its adjusted earnings per share actually rose, investors appeared to focus on the decline in reported net income.
UL Solutions is up 41.7% since the beginning of the year, and at $70.35 per share, it is trading close to its 52-week high of $73.17 from July 2025. Investors who bought $1,000 worth of UL Solutions’s shares at the IPO in April 2024 would now be looking at an investment worth $2,013.
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
