What Happened?

A number of stocks jumped in the afternoon session after investors scooped up equities, shaking off the initial concerns inferred from the Fed's dot plot, with tech stocks leading the charge. 

As a reminder, the Federal Reserve cut its benchmark interest rate by 25 basis points yesterday and signaled that more reductions could come before year-end and beyond. Initially when the cut was announced and Fed Chair Powell held his press conference, there was a pullback in the market as the Fed's "dot plot" revealed that only one cut was likely for 2026. This was below the three cuts that had been priced into the markets. This was the first interest rate cut of 2025, a move investors had widely anticipated. In response to the decision, stocks rose significantly, positioning major indexes like the S&P 500 and Nasdaq to open at record levels. 

The Fed's decision was influenced by signs of a weakening labor market. Lower interest rates are generally seen as positive for stocks because they reduce borrowing costs for businesses and make fixed-income investments like bonds less attractive by comparison, driving capital into the equity market. While Fed Chair Powell noted the path forward has risks, the prospect of looser monetary policy has fueled optimism on Wall Street.

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:

• Regional Banks company Simmons First National (NASDAQ: SFNC) jumped 3%. Is now the time to buy Simmons First National? Access our full analysis report here, it’s free.
• Regional Banks company Peoples Bancorp (NASDAQ: PEBO) jumped 2.8%. Is now the time to buy Peoples Bancorp? Access our full analysis report here, it’s free.
• Regional Banks company Origin Bancorp (NYSE: OBK) jumped 3.2%. Is now the time to buy Origin Bancorp? Access our full analysis report here, it’s free.
• Regional Banks company Lake City Bank (NASDAQ: LKFN) jumped 3.1%. Is now the time to buy Lake City Bank? Access our full analysis report here, it’s free.
• Regional Banks company First Financial Bancorp (NASDAQ: FFBC) jumped 2.9%. Is now the time to buy First Financial Bancorp? Access our full analysis report here, it’s free.

Zooming In On Origin Bancorp (OBK)

Origin Bancorp’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 7 days ago when the stock dropped 6.1% on the news that it disclosed that a customer, Tricolor Holdings, filed for Chapter 7 bankruptcy, prompting the bank to place approximately $30.1 million in loans on non-accrual status. 

According to a company SEC filing, the bank is now evaluating the need for additional provisions for credit losses related to these loans. The filing also noted the immediate resignation of board member Daniel T. Chu, who serves as the CEO of Tricolor. While the bank stated there were no disagreements with Mr. Chu, the connection highlights the direct impact of Tricolor's financial distress. This development heightens concerns for investors, as Origin Bank now must pursue remedies to protect its interests and manage potential losses from the defaulted loans.

Origin Bancorp is up 10.3% since the beginning of the year, but at $36.74 per share, it is still trading 10.2% below its 52-week high of $40.93 from February 2025. Investors who bought $1,000 worth of Origin Bancorp’s shares 5 years ago would now be looking at an investment worth $1,681.

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