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% last 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:
- Digital Media & Content Platforms company Rumble (NASDAQ: RUM) fell 3%. Is now the time to buy Rumble? Access our full analysis report here, it’s free.
- Traditional Media & Publishing company EchoStar (NASDAQ: SATS) fell 3.2%. Is now the time to buy EchoStar? Access our full analysis report here, it’s free.
- IT Services & Consulting company Kyndryl (NYSE: KD) fell 2.6%. Is now the time to buy Kyndryl? Access our full analysis report here, it’s free.
- Business Process Outsourcing & Consulting company FTI Consulting (NYSE: FCN) fell 2.9%. Is now the time to buy FTI Consulting? Access our full analysis report here, it’s free.
- Satellite Telecommunication Services company Iridium (NASDAQ: IRDM) fell 4.3%. Is now the time to buy Iridium? Access our full analysis report here, it’s free.
Zooming In On Iridium (IRDM)
Iridium’s shares are quite volatile and have had 17 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 9.2% as that the Bureau of Labor Statistics revealed that the economy added significantly fewer jobs than previously reported over the last year.
The U.S. Bureau of Labor Statistics (BLS) issued a preliminary benchmark revision indicating that nonfarm employment was overstated by 911,000 jobs for the 12 months ending in March 2025. This routine but significant adjustment suggests the labor market has been considerably weaker than initial monthly reports suggested. Such a large downward revision can be a key indicator of a cooling economy. For investors, this news is mixed; while a slowdown could prompt the Federal Reserve to consider interest rate cuts, it also heightens concerns about a potential recession. The report noted that the professional and business services and manufacturing sectors saw notable downward revisions, signaling specific areas of weakness.
JPMorgan Chase CEO Jamie Dimon added that the U.S. economy is "weakening," though he stopped short of predicting a recession. "Whether it's on the way to recession or just weakening, I don't know," he said. Dimon's remarks are closely watched, given his influence as head of one of the nation's largest banks.
Iridium is down 38.9% since the beginning of the year, and at $18.06 per share, it is trading 46.2% below its 52-week high of $33.57 from October 2024. Investors who bought $1,000 worth of Iridium’s shares 5 years ago would now be looking at an investment worth $648.71.
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