Kohl's jumps 7% as investors rotate into beaten-down retail stocks like Macy's, while Abercrombie & Fitch slips.

Investors are rotating funds into struggling department stores, pushing Kohl's stock up 7% and Macy's up 3%, reversing recent selloffs despite mixed sales results. Kohl's beat earnings expectations and raised its full-year guidance, but sales remain soft, partly due to competition within its Sephora partnership. Meanwhile, Abercrombie & Fitch shares fell 2% as investors took profits after a strong summer rally. This selective buying reflects a rotation into cheaper, turnaround retail stocks rather than a broad sector rally, with investors advised to consider volatility and staged entries given the mixed trends.