What Happened?

A number of stocks fell in the afternoon session after the major pulled back (Nasdaq -1.3%, S&P 500 - 1.4%) as Treasury yields rose, reflecting market anxiety over a draft federal budget that could worsen the already wide US fiscal deficit. 

A poor auction for 20-year U.S. Treasury bonds further raised concerns, as weak demand implies investors are becoming more cautious about holding long-dated U.S. debt. 

As a reminder, the driver of a stock's value is the sum of its future cash flows discounted back to today. With lower interest rates (yields), investors can apply higher valuations to their stocks; when yields rise, that math works in reverse. 

Adding to the cautious mood were earnings results from retail giants Target and Lowe's, both of which reported weak earnings that missed expectations, pointing to a potential slowdown in consumer spending and further weighing on sentiment. 

Lastly, some influential voices such as Jamie Dimon (JPMorgan) and Steve Cohen (Point72) have made cautious comments about market, which can sometimes become self-fulfilling prophecies as investors increase their cautiousness and skittishness.

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 Envista (NYSE: NVST) fell 5.8%. Is now the time to buy Envista? Access our full analysis report here, it’s free.
• Testing & Diagnostics Services company NeoGenomics (NASDAQ: NEO) fell 7.1%. Is now the time to buy NeoGenomics? Access our full analysis report here, it’s free.
• Hospital Chains company Acadia Healthcare (NASDAQ: ACHC) fell 5.2%. Is now the time to buy Acadia Healthcare? Access our full analysis report here, it’s free.
• Healthcare Technology for Providers company Astrana Health (NASDAQ: ASTH) fell 7.4%. Is now the time to buy Astrana Health? Access our full analysis report here, it’s free.
• Healthcare Technology for Patients company Hims & Hers Health (NYSE: HIMS) fell 5.5%. Is now the time to buy Hims & Hers Health? Access our full analysis report here, it’s free.

Zooming In On Astrana Health (ASTH)

Astrana Health’s shares are very volatile and have had 21 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.

Astrana Health is down 20.3% since the beginning of the year, and at $25.67 per share, it is trading 59% below its 52-week high of $62.54 from October 2024. Investors who bought $1,000 worth of Astrana Health’s shares 5 years ago would now be looking at an investment worth $1,464.

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