What Happened?
A number of stocks jumped in the afternoon session after the latest Consumer Price Index (CPI) report showed inflation metrics ticking down slightly.
The data, a key measure of inflation, was a welcome surprise for investors and reinforced the market's belief that the Federal Reserve will cut interest rates by 25 basis points (bps) during the next meeting. A basis point is one-hundredth of a percentage point. A lower interest rate environment is typically favorable for growth sectors like software, as it reduces borrowing costs and makes future profits more valuable in today's terms. The cooler-than-expected inflation reading prompted a strong positive reaction, with pre-market futures rocketing higher on the news.
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:
- Beverages, Alcohol, and Tobacco company Boston Beer (NYSE: SAM) jumped 2.7%. Is now the time to buy Boston Beer? Access our full analysis report here, it’s free for active Edge members.
- Personal Care company BeautyHealth (NASDAQ: SKIN) jumped 7.3%. Is now the time to buy BeautyHealth? Access our full analysis report here, it’s free for active Edge members.
- Beverages, Alcohol, and Tobacco company Zevia (NYSE: ZVIA) jumped 2.5%. Is now the time to buy Zevia? Access our full analysis report here, it’s free for active Edge members.
Zooming In On BeautyHealth (SKIN)
BeautyHealth’s shares are extremely volatile and have had 69 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 24 days ago when the stock dropped 4.2% on the news that signs of weakening consumer health and a cautious outlook for the upcoming holiday season emerged. The Conference Board reported that its consumer confidence index fell more than expected in September, hitting its lowest level since April. This drop is fueled by growing pessimism among Americans regarding inflation and a softening job market. Compounding these concerns, a pre-holiday survey indicates that the vast majority of consumers plan to cut back on spending compared to last year, citing the rising cost of living. With shoppers expected to prioritize essentials, discretionary categories like luxury items and home goods could face significant headwinds, creating a challenging environment for retailers.
BeautyHealth is down 13.7% since the beginning of the year, and at $1.39 per share, it is trading 47.1% below its 52-week high of $2.63 from September 2025.
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