What Happened?
A number of stocks fell in the afternoon session after markets continued to decline, as investors grew cautious ahead of a key speech by Federal Reserve Chair Jerome Powell. The move came as U.S. equity markets recorded a fifth consecutive day of losses for major indexes like the S&P 500, with technology stocks experiencing the largest declines. Investors have grown wary that the sharp rally in the tech sector since April may have advanced too far. The market-wide caution is largely driven by the upcoming Jackson Hole symposium, a meeting of central bankers, where traders are anxiously awaiting Fed Chair Powell's speech on Friday for guidance on the future path of interest rates.
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:
- Personal Care company BeautyHealth (NASDAQ: SKIN) fell 3.1%. Is now the time to buy BeautyHealth? Access our full analysis report here, it’s free.
- Leisure Products company Polaris (NYSE: PII) fell 3%. Is now the time to buy Polaris? Access our full analysis report here, it’s free.
- Specialty Equipment Distributors company Herc (NYSE: HRI) fell 3.1%. Is now the time to buy Herc? Access our full analysis report here, it’s free.
- Home Construction Materials company Quanex (NYSE: NX) fell 3.1%. Is now the time to buy Quanex? Access our full analysis report here, it’s free.
- Industrial & Environmental Services company Vestis (NYSE: VSTS) fell 3.1%. Is now the time to buy Vestis? Access our full analysis report here, it’s free.
Zooming In On Herc (HRI)
Herc’s shares are extremely volatile and have had 39 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 7 days ago when the stock dropped 3.1% as an unexpectedly sharp rise in wholesale inflation fueled concerns about rising costs and their impact on corporate profits. The primary catalyst was the July 2025 Producer Price Index (PPI), a measure of inflation at the wholesale level, which jumped 0.9% against forecasts of a 0.2% rise. This represents the most significant monthly increase in over three years, pointing to mounting cost pressures for manufacturers, with tariffs cited as a key factor. This data complicates the Federal Reserve's upcoming interest rate decisions, as persistent inflation may prevent rate cuts, creating a headwind for cyclical sectors like Industrials.
Herc is down 35.8% since the beginning of the year, and at $119.49 per share, it is trading 50.1% below its 52-week high of $239.28 from November 2024. Investors who bought $1,000 worth of Herc’s shares 5 years ago would now be looking at an investment worth $2,960.
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