What Happened?
Shares of scientific instruments company Waters Corporation (NYSE: WAT) fell 2.2% in the afternoon session after the major indices continued to retreat (Nasdaq -1.5%, S&P 500 -1.2%) amid profit-taking and renewed concerns about tariffs. The decline was not specific to the company but part of a wider market sell-off, as major indexes like the S&P 500 and Nasdaq each fell by over 1%. Investor sentiment soured following the release of the ISM Manufacturing report, which indicated that U.S. manufacturing activity had contracted for the sixth consecutive month. Adding to the market's anxiety, a court decision ruled that most of the Trump administration's tariffs were illegal. While the tariffs remain in place pending appeal, the news pushed Treasury yields and market volatility higher, contributing to the slump in equities.
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What Is The Market Telling Us
Waters Corporation’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 20 days ago when the stock gained 3.4% on the news that markets continued to rally amid growing speculation of an impending interest rate cut by the Federal Reserve. Following a favorable Consumer Price Index (CPI) report, investors are increasingly betting on a rate reduction next month, a sentiment amplified by U.S. Treasury Secretary Scott Bessent's call for a significant cut. This has fueled a 'risk-on' environment across Wall Street. Lower interest rates are typically beneficial for growth-oriented sectors like healthcare, as they reduce the cost of borrowing for research and innovation and increase the present value of future earnings.
Waters Corporation is down 19.4% since the beginning of the year, and at $296.67 per share, it is trading 28.9% below its 52-week high of $417.28 from January 2025. Investors who bought $1,000 worth of Waters Corporation’s shares 5 years ago would now be looking at an investment worth $1,367.
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