What Happened?
A number of stocks fell in the afternoon session after the U.S. Commerce Department initiated a national security investigation into medical equipment and devices, raising concerns about potential tariffs.
The probe, conducted under Section 232 of the Trade Expansion Act, examines whether imports of items like syringes, infusion pumps, and surgical instruments pose a national security risk. Such investigations can pave the way for new import duties, creating a significant overhang for the sector. The goal of potential tariffs would be to boost domestic manufacturing by increasing the cost of foreign goods. This development has introduced new uncertainty for the industry, leading to broad-based declines in the stocks of major manufacturers, including Baxter International and GE HealthCare, as investors weigh the potential impact on supply chains and costs.
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:
- Dental Equipment & Technology company Align Technology (NASDAQ: ALGN) fell 2.8%. Is now the time to buy Align Technology? Access our full analysis report here, it’s free.
- Patient Monitoring company ResMed (NYSE: RMD) fell 2.8%. Is now the time to buy ResMed? Access our full analysis report here, it’s free.
- Patient Monitoring company Insulet (NASDAQ: PODD) fell 3%. Is now the time to buy Insulet? Access our full analysis report here, it’s free.
- Dental Equipment & Technology company Envista (NYSE: NVST) fell 2.5%. Is now the time to buy Envista? Access our full analysis report here, it’s free.
- Dental Equipment & Technology company Dentsply Sirona (NASDAQ: XRAY) fell 3.2%. Is now the time to buy Dentsply Sirona? Access our full analysis report here, it’s free.
Zooming In On Dentsply Sirona (XRAY)
Dentsply Sirona’s shares are somewhat volatile and have had 12 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 biggest move we wrote about over the last year was 5 months ago when the stock gained 6% on the news that the major indices popped (Nasdaq +3.4%, S&P 500 +2.5%) in response to the positive outcome of U.S.-China trade negotiations, as both sides agreed to pause some tariffs for 90 days, signaling a potential turning point in ongoing tensions.
This rollback cuts U.S. tariffs on Chinese goods to 30% and Chinese tariffs on U.S. imports to 10%, giving companies breathing room to reset inventories and supply chains. However, President Trump clarified that tariffs could go "substantially higher" if a full deal with China wasn't reached during the 90-day pause, but not all the way back to the previous levels.
Still, the agreement cooled fears of a prolonged trade war, helping stabilize expectations for global growth and trade flows and fueling renewed optimism. The optimism appeared concentrated in key trade-sensitive sectors, particularly technology, retail, and industrials, as lower tariffs reduce cost pressures and restore cross-border demand.
Dentsply Sirona is down 33.5% since the beginning of the year, and at $12.47 per share, it is trading 53.9% below its 52-week high of $27.06 from September 2024. Investors who bought $1,000 worth of Dentsply Sirona’s shares 5 years ago would now be looking at an investment worth $287.41.
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