What Happened?

A number of stocks fell in the afternoon session after a surprisingly hot wholesale inflation report fueled investor concerns about persistent price pressures. 

The Producer Price Index (PPI), a key measure of inflation at the wholesale level, increased by 0.5% in January, significantly higher than the 0.3% anticipated by economists. More concerning was the core PPI, which excludes volatile food and energy prices, as it surged by 0.8%, far exceeding the expected 0.3% rise. This data suggests that inflation may be more entrenched than previously thought, potentially impacting future interest rate decisions. In response to the news, major market indices, including the S&P 500, Dow Jones, and Nasdaq, all traded sharply lower as investors reassessed the economic outlook.

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:

• Health Insurance Providers company Clover Health (NASDAQ: CLOV) fell 5.1%. Is now the time to buy Clover Health? Access our full analysis report here, it’s free.
• Health Insurance Providers company Alignment Healthcare (NASDAQ: ALHC) fell 5.1%. Is now the time to buy Alignment Healthcare? Access our full analysis report here, it’s free.
• Surgical Equipment & Consumables - Diversified company Solventum (NYSE: SOLV) fell 4.8%. Is now the time to buy Solventum? Access our full analysis report here, it’s free.
• Generic Pharmaceuticals company ANI Pharmaceuticals (NASDAQ: ANIP) fell 4.9%. Is now the time to buy ANI Pharmaceuticals? Access our full analysis report here, it’s free.
• Testing & Diagnostics Services company Guardant Health (NASDAQ: GH) fell 3.4%. Is now the time to buy Guardant Health? Access our full analysis report here, it’s free.

Zooming In On Alignment Healthcare (ALHC)

Alignment Healthcare’s shares are very volatile and have had 24 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 about 1 month ago when the stock gained 4% on the news that comments from a Baird analyst suggested a promising outlook for earnings growth, helping the stock rebound from a sharp decline in the previous trading session. The recovery followed a significant drop after the Centers for Medicare & Medicaid Services (CMS) released a preliminary payment proposal for Medicare Advantage that fell short of expectations. The agency proposed a mere 0.09% increase in payment rates, which shocked the industry as analysts had projected growth between 4% and 6%. However, Baird analyst Michael Ha later stated on CNBC that he foresaw a promising phase of earnings growth for the company. He suggested the stock could potentially increase three to four times within the next four years, which sparked the recovery.

Alignment Healthcare is down 4.9% since the beginning of the year, and at $19.22 per share, it is trading 19.3% below its 52-week high of $23.81 from January 2026. Investors who bought $1,000 worth of Alignment Healthcare’s shares at the IPO in March 2021 would now be looking at an investment worth $1,110.

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