What Happened?
A number of stocks fell in the afternoon session after a surprisingly hot wholesale inflation report fueled investor concerns about persistent price pressures.
The Producer Price Index (PPI), a key measure of inflation at the wholesale level, increased by 0.5% in January, significantly higher than the 0.3% anticipated by economists. More concerning was the core PPI, which excludes volatile food and energy prices, as it surged by 0.8%, far exceeding the expected 0.3% rise. This data suggests that inflation may be more entrenched than previously thought, potentially impacting future interest rate decisions. In response to the news, major market indices, including the S&P 500, Dow Jones, and Nasdaq, all traded sharply lower as investors reassessed the economic outlook.
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:
- Healthcare Technology for Providers company Evolent Health (NYSE: EVH) fell 4.7%. Is now the time to buy Evolent Health? Access our full analysis report here, it’s free.
- Patient Monitoring company iRhythm (NASDAQ: IRTC) fell 5.5%. Is now the time to buy iRhythm? Access our full analysis report here, it’s free.
Zooming In On iRhythm (IRTC)
iRhythm’s shares are quite volatile and have had 18 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 4 days ago when the stock dropped 7.1% on the news that the Trump administration's announcement of new global tariffs reignited trade policy uncertainty. The move came swiftly after the Supreme Court ruled the previous week that the president could not use the International Emergency Economic Powers Act (IEEPA) for such duties, a decision that had initially sent markets higher. However, the administration invoked a different authority, the Trade Act of 1974, to impose a 15% global tariff for up to 150 days. The rapid reimposition of trade barriers creates significant uncertainty for companies across multiple sectors that depend on international supply chains and global trade. Investors are now weighing the potential impact of these new duties on corporate earnings and broader economic activity.
iRhythm is down 23.7% since the beginning of the year, and at $133.76 per share, it is trading 29.3% below its 52-week high of $189.25 from January 2026. Investors who bought $1,000 worth of iRhythm’s shares 5 years ago would now be looking at an investment worth $874.71.
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