What Happened?
A number of stocks fell in the afternoon session after Federal Reserve Chair Jerome Powell signaled a cautious stance on future monetary policy decisions during a speech in Chicago, emphasizing that trade tariffs could add upward pressure to inflation in the short term and complicate the Fed's efforts to stabilize the economy. He warned that such trade measures are "likely to move us further away from our goals," referring to the Fed's dual mandate of price stability and maximum employment.
The comments did little to improve sentiment, as major indices were already in the negative territory in the morning session after Nvidia announced it might be unable to sell some high-end chips (including the H20 chips) to China due to export controls and requirements from the Trump administration. As a result, the company planned to take a $5.5 billion charge due to inventory writedowns and canceled sales. Adding to the sector's pressure, chip tool maker ASML posted weak bookings (a key demand indicator) which fell below Wall Street's expectations, noting that tariffs had made the industry's outlook more uncertain.
Taken together, these updates likely fueled investor anxiety, amplifying concerns about global trade tensions, tech sector vulnerability, and the Fed's limited room to maneuver in an increasingly uncertain macro environment.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, following stocks were impacted:
- Financial Technology company Robinhood (NASDAQ:HOOD) fell 9%. Is now the time to buy Robinhood? Access our full analysis report here, it’s free.
- Advertising Software company AppLovin (NASDAQ:APP) fell 8.2%. Is now the time to buy AppLovin? Access our full analysis report here, it’s free.
- Healthcare Technology for Patients company Hims & Hers Health (NYSE:HIMS) fell 10.2%. Is now the time to buy Hims & Hers Health? Access our full analysis report here, it’s free.
- Home Furniture Retailer company Sleep Number (NASDAQ:SNBR) fell 5.9%. Is now the time to buy Sleep Number? Access our full analysis report here, it’s free.
- Ground Transportation company Covenant Logistics (NYSE:CVLG) fell 7.5%. Is now the time to buy Covenant Logistics? Access our full analysis report here, it’s free.
Zooming In On Hims & Hers Health (HIMS)
Hims & Hers Health’s shares are extremely volatile and have had 87 moves greater than 5% over the last year. But moves this big are rare even for Hims & Hers Health and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 15 days ago, when the stock gained 12.5% on the news that the company revealed it would begin offering Eli Lilly's weight-loss medications (Zepbound) on its platform, marking a significant expansion beyond its previous focus on lower-cost alternatives to Novo Nordisk's Wegovy.
This move positioned the company to tap into the growing demand for weight loss solutions and attract a broader customer base. The company added, "As we look ahead, we plan to continue to expand our weight loss offering to deliver an even more holistic, personalized experience."
Hims & Hers Health is up 6.9% since the beginning of the year, but at $26.94 per share, it is still trading 60.8% below its 52-week high of $68.74 from February 2025. Investors who bought $1,000 worth of Hims & Hers Health’s shares 5 years ago would now be looking at an investment worth $2,710.
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