What Happened?
A number of stocks fell in the afternoon session after markets pulled back, reversing early gains, as investor sentiment remained cautious despite a softer-than-expected inflation reading.
Stocks rose in the morning session after an unexpected drop in the Producer Price Index (PPI) for August signaled easing inflation and raised expectations for a potential Federal Reserve interest rate cut. The U.S. Bureau of Labor Statistics reported that the PPI, which measures wholesale prices, edged down 0.1% the previous month, contrary to analyst expectations for a 0.3% rise. This data gives the Federal Reserve more flexibility to consider lowering interest rates to stimulate the economy.
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:
- Medical Devices & Supplies - Diversified company Boston Scientific (NYSE:BSX) fell 3.6%. Is now the time to buy Boston Scientific? Access our full analysis report here, it’s free.
- Outpatient & Specialty Care company U.S. Physical Therapy (NYSE:USPH) fell 3.4%. Is now the time to buy U.S. Physical Therapy? Access our full analysis report here, it’s free.
- Genomics & Sequencing company 10x Genomics (NASDAQ:TXG) fell 5.6%. Is now the time to buy 10x Genomics? Access our full analysis report here, it’s free.
- Medical Devices & Supplies - Imaging, Diagnostics company GE HealthCare (NASDAQ:GEHC) fell 3.3%. Is now the time to buy GE HealthCare? Access our full analysis report here, it’s free.
- Medical Devices & Supplies - Specialty company Integer Holdings (NYSE:ITGR) fell 3%. Is now the time to buy Integer Holdings? Access our full analysis report here, it’s free.
Zooming In On 10x Genomics (TXG)
10x Genomics’s shares are extremely volatile and have had 47 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 8 days ago when the stock dropped 4.9% on the news that the major indices continued to retreat amid profit-taking and renewed concerns about tariffs. Investors reacted to a federal court ruling that most of President Trump's global tariffs were illegal, raising uncertainty over trade policy and the fiscal impact of potential refunds. Rising Treasury yields added to the pressure, with the 10-year climbing above 4.2% and the 30-year nearing 5%, intensifying worries about stretched equity valuations. September's historically weak track record for stocks further dampened sentiment, leaving traders cautious ahead of the jobs report later in the week and the Federal Reserve's upcoming rate decision.
10x Genomics is down 9.8% since the beginning of the year, and at $12.80 per share, it is trading 45.5% below its 52-week high of $23.48 from September 2024. Investors who bought $1,000 worth of 10x Genomics’s shares 5 years ago would now be looking at an investment worth $112.77.
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