What Happened?

A number of stocks fell in the afternoon session after the release of a stronger-than-anticipated Producer Price Index (PPI) report showed wholesale inflation rose more than expected in January. 

The U.S. Bureau of Labor Statistics reported that the PPI, a key measure of inflation at the wholesale level, increased by 0.5% last month, significantly above the 0.3% consensus forecast from economists. On a year-over-year basis, the index rose 2.9%. This unexpectedly high reading suggests that inflationary pressures in the supply chain are more persistent than previously thought. The data has dampened investor optimism for near-term interest rate cuts from the Federal Reserve, as the central bank is less likely to lower borrowing costs while inflation remains elevated. This shift in expectations for monetary policy triggered a broad sell-off across the market, as traders adjusted to the possibility of interest rates remaining higher for longer.

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:

• Payment Processing company Shift4 (NYSE: FOUR) fell 8.8%. Is now the time to buy Shift4? Access our full analysis report here, it’s free.
• Personal Loan company Affirm (NASDAQ: AFRM) fell 8.4%. Is now the time to buy Affirm? Access our full analysis report here, it’s free.
• Custody Bank company Voya Financial (NYSE: VOYA) fell 7%. Is now the time to buy Voya Financial? Access our full analysis report here, it’s free.
• Custody Bank company StepStone Group (NASDAQ: STEP) fell 8.1%. Is now the time to buy StepStone Group? Access our full analysis report here, it’s free.
• Asset Management company Ares (NYSE: ARES) fell 6.2%. Is now the time to buy Ares? Access our full analysis report here, it’s free.

Zooming In On Shift4 (FOUR)

Shift4’s shares are very volatile and have had 20 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 1 day ago when the stock dropped 14.4% on the news that it provided a disappointing financial outlook alongside its fourth-quarter results. 

While the company's adjusted earnings per share of $1.60 for the quarter met Wall Street's expectations, its guidance for the future sparked a sell-off. Management's revenue forecast for the upcoming first quarter was a stark 51.6% below analyst estimates. Furthermore, the adjusted earnings per share guidance for the full 2026 financial year missed projections by 13.2% at the midpoint. The weak forecast overshadowed the in-line quarterly results, raising significant concerns among investors about the company's near-term growth trajectory.

Shift4 is down 29.5% since the beginning of the year, and at $44.19 per share, it is trading 58.6% below its 52-week high of $106.81 from July 2025. Investors who bought $1,000 worth of Shift4’s shares 5 years ago would now be looking at an investment worth $566.83.

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