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:

• Terrestrial Telecommunication Services company Lumen (NYSE: LUMN) jumped 4.5%. Is now the time to buy Lumen? Access our full analysis report here, it’s free.
• Government & Technical Consulting company Amentum (NYSE: AMTM) jumped 3.4%. Is now the time to buy Amentum? Access our full analysis report here, it’s free.
• IT Services & Consulting company DXC (NYSE: DXC) jumped 3.6%. Is now the time to buy DXC? Access our full analysis report here, it’s free.
• Traditional Media & Publishing company EchoStar (NASDAQ: SATS) jumped 4.3%. Is now the time to buy EchoStar? Access our full analysis report here, it’s free.
• IT Distribution & Solutions company ScanSource (NASDAQ: SCSC) jumped 3.3%. Is now the time to buy ScanSource? Access our full analysis report here, it’s free.

Zooming In On Lumen (LUMN)

Lumen’s shares are extremely volatile and have had 66 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 29.3% 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.

Lumen is up 8% since the beginning of the year, but at $8.31 per share, it is still trading 29.8% below its 52-week high of $11.83 from November 2025. Investors who bought $1,000 worth of Lumen’s shares 5 years ago would now be looking at an investment worth $704.41.

Microsoft, Alphabet, Coca-Cola, Monster Beverage—all began as under-the-radar growth stories riding a massive trend. We’ve identified the next one: a profitable AI semiconductor play Wall Street is still overlooking.Go here for access to our full report, it’s free.