What Happened?
A number of stocks fell in the afternoon session after President Trump criticized the Federal Reserve's approach to interest rate cuts, warning that the pace was slow and could hinder economic growth. Trump's comments added pressure to an already sensitive market, raising concerns about political interference in monetary policy.
Meanwhile, Fed Chair Jerome Powell maintained a cautious stance the previous week, highlighting the difficulty of balancing the dual mandate of steady employment and price stability amid the escalating trade tension. Investor sentiment was further dampened by the absence of constructive progress in trade negotiations, especially US-China relations which took a turn for the worse in the previous week.
Overall, the outlook seemed more unclear heading into the first quarter 2025 earnings season, as a combination of hard to predict monetary policy and unresolved trade tensions weighed on business confidence.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, following stocks were impacted:
- Home Furniture Retailer company RH (NYSE: RH) fell 6.1%. Is now the time to buy RH? Access our full analysis report here, it’s free.
- Footwear Retailer company Boot Barn (NYSE: BOOT) fell 5.2%. Is now the time to buy Boot Barn? Access our full analysis report here, it’s free.
- Discount Retailer company Ollie's (NASDAQ: OLLI) fell 7%. Is now the time to buy Ollie's? Access our full analysis report here, it’s free.
- Hospital Chains company Universal Health Services (NYSE: UHS) fell 9.6%. Is now the time to buy Universal Health Services? Access our full analysis report here, it’s free.
- Sales Software company Salesforce (NYSE: CRM) fell 5.2%. Is now the time to buy Salesforce? Access our full analysis report here, it’s free.
Zooming In On Universal Health Services (UHS)
Universal Health Services’s shares are not very volatile and have only had 6 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.
Universal Health Services is down 13% since the beginning of the year, and at $156.29 per share, it is trading 35.3% below its 52-week high of $241.52 from September 2024. Investors who bought $1,000 worth of Universal Health Services’s shares 5 years ago would now be looking at an investment worth $1,598.
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