What Happened?
A number of stocks fell in the afternoon session after 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.
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:
- Construction and Maintenance Services company Concrete Pumping (NASDAQ: BBCP) fell 3.6%. Is now the time to buy Concrete Pumping? Access our full analysis report here, it’s free.
- Electronic Components company Allient (NASDAQ: ALNT) fell 4.5%. Is now the time to buy Allient? Access our full analysis report here, it’s free.
- Inspection Instruments company Keysight (NYSE: KEYS) fell 3.6%. Is now the time to buy Keysight? Access our full analysis report here, it’s free.
- Ground Transportation company Universal Logistics (NASDAQ: ULH) fell 5.4%. Is now the time to buy Universal Logistics? Access our full analysis report here, it’s free.
- Facility Services company BrightView (NYSE: BV) fell 3.6%. Is now the time to buy BrightView? Access our full analysis report here, it’s free.
Zooming In On Universal Logistics (ULH)
Universal Logistics’s shares are very volatile and have had 22 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 2 days ago when the stock gained 6.4% as an in-line inflation report fueled hopes for interest rate cuts and the U.S. and China agreed to extend their tariff truce. The Consumer Price Index (CPI), a key measure of inflation, came in largely as expected, holding steady at 2.7% year-over-year. This reading boosted investor optimism that the Federal Reserve will have room to lower interest rates at its next meeting, which could reduce borrowing costs for companies and consumers. Adding to the positive sentiment, the U.S. and China extended their tariff truce for another 90 days. This development alleviates concerns about renewed trade tensions, which is a significant relief for industrial companies reliant on global supply chains and international sales. Together, these events create a favorable outlook for economic growth, benefiting cyclical sectors like industrials.
Universal Logistics is down 43.6% since the beginning of the year, and at $24.68 per share, it is trading 52.8% below its 52-week high of $52.28 from November 2024. Investors who bought $1,000 worth of Universal Logistics’s shares 5 years ago would now be looking at an investment worth $1,275.
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