Amid the DeepSeek-fuelled selloff on Wall Street yesterday it was not all bad news for investors as Rocket Companies (RKT) led a rally among lenders and homebuilders that defied some of the headlines and heavy selling elsewhere.
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It may have been carnage for tech stocks but RKT shot up 6% as Treasury yields declined amid the general risk-off mood in the market, with the 10yr yields dipping below 4.5% to hit its lowest level this year. RKT is a fintech platform that specialises in mortgages and seemed to benefit from the drop in yields as well as a rise in building activity. Earlier this month UBS upgraded RKT to Neutral from Sell with a $11.50 price target.
As a mortgage provider RKT is sensitive to rates and homebuyer activity, which seem to be improving. Census Bureau data showed U.S. new home sales jumped to 698,000 in December, well ahead of forecasts. Earlier this month data showed new housing starts were up 15.8% in December.
RKT Paves the Way
Wholesale mortgage provider UWM Holdings (UWMC) also rallied, gaining more than 3.5%, while residential mortgage companies like Mr Cooper Group (COOP) and Loandepot (LDI) both added approximately 3% for the session.
Homebuilders also climbed, with the iShares U.S. Home Construction ETF (ITB) up almost 2.5%.
Indeed, while DeepSeek and Nvidia (NVDA) grabbed all the headlines, there were more advancing stocks on the NYSE than declining, though this was the opposite on the tech-focused Nasdaq.
Is RKT a Good Stock to Buy?
Overall, Wall Street has a Hold consensus rating on RKT, based on 10 Holds and three Sells. The $13.42 average price target implies over 5% upside, however, following a 22% decline in the last three months.
