What Happened?

A number of stocks fell in the afternoon session after a broad pickup in energy expenses lifted September inflation to 3.7%, surpassing expectations and driving bond yields higher. 

The hotter-than-anticipated inflation reading dampened market sentiment across Wall Street, weighing heavily on major benchmark indexes and pulling equities down from recent highs. When inflation accelerates, it often increases expectations that borrowing costs will remain elevated for an extended period to curb economic overheating. Elevated interest rates can compress corporate valuations, particularly across growth sectors such as technology and semiconductors, where future earnings expectations play a central role in pricing. 

Semiconductor shares faced extended pressure, marking their seventh consecutive session of declines as market participants recalibrated risk appetites. Beyond higher financing expenses, persistent energy-driven inflation risks squeezing operating margins and weakening broader enterprise spending. Investors are continuing to evaluate whether persistent price pressures will lead to tighter financial conditions and prolonged headwinds for capital-intensive industries.

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:

• Terrestrial Telecommunication Services company Cogent (NASDAQ: CCOI) fell 6.5%. Is now the time to buy Cogent? Access our full analysis report here, it’s free.
• Electronic Components & Manufacturing company Flex (NASDAQ: FLEX) fell 8.4%. Is now the time to buy Flex? Access our full analysis report here, it’s free.
• Specialized Technology company Mirion (NYSE: MIR) fell 2.6%. Is now the time to buy Mirion? Access our full analysis report here, it’s free.
• Hardware & Infrastructure company NetApp (NASDAQ: NTAP) fell 5.8%. Is now the time to buy NetApp? Access our full analysis report here, it’s free.
• Satellite Telecommunication Services company Viasat (NASDAQ: VSAT) fell 7.7%. Is now the time to buy Viasat? Access our full analysis report here, it’s free.

Zooming In On Flex (FLEX)

Flex’s shares are extremely volatile and have had 44 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 1 day ago when the stock dropped 6.9% on the news that investors focused on financial risks tied to the planned spin-off of its Cloud and Power Infrastructure unit into Axiom Solutions International. According to TipRanks, the decline is centered on the terms of that separation, and on a $37.5 billion valuation for Axiom that the write-up says looks high next to the unit’s margins and capital spending. Flex’s Oct. 5 release said the company agreed to sell $2 billion of Axiom Series A convertible preferred stock to General Catalyst, Koch Equity Development, and co-investors at that $37.5 billion initial enterprise value. The preferred pays a 10% cash dividend before the separation, then steps down to 6% in cash or 7% if paid in kind. Flex’s Oct. 5 filing says the company guarantees Axiom’s obligation to redeem the shares if the spin-off is not completed by Dec. 31, 2027. The redemption price is 115% of the purchase price in cash, or 125% if paid in Flex shares, minus cash dividends already paid. Any unpaid amount then accrues interest at 12% a year. The separation is planned for the first quarter of 2027.

Flex is up 58.9% since the beginning of the year, but at $101.17 per share, it is still trading 37.6% below its 52-week high of $162.07 from June 2026. Investors who bought $1,000 worth of Flex’s shares 5 years ago would now be looking at an investment worth $5,330.

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