What Happened?

A number of stocks jumped in the afternoon session after a softer-than-expected inflation report fueled hopes for interest rate cuts by the Federal Reserve. The January Consumer Price Index (CPI), a key measure of inflation, rose by 0.2%, which was less than economists had forecast, with the annual rate cooling to 2.4%. This encouraging data increased market expectations for the Fed to begin cutting interest rates as early as June. The news prompted a rally in Treasuries as their yields fell. While the market's reaction was initially described as a "bumpy ride" due to concerns in other sectors, the favorable inflation data ultimately helped calm Wall Street. Lower inflation is a key prerequisite for the central bank to ease its monetary policy, which is generally supportive of stock valuations.

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:

• Hospital Chains company Acadia Healthcare (NASDAQ: ACHC) jumped 6.3%. Is now the time to buy Acadia Healthcare? Access our full analysis report here, it’s free.
• Healthcare Technology for Patients company Hims & Hers Health (NYSE: HIMS) jumped 4%. Is now the time to buy Hims & Hers Health? Access our full analysis report here, it’s free.
• Testing & Diagnostics Services company RadNet (NASDAQ: RDNT) jumped 6.5%. Is now the time to buy RadNet? Access our full analysis report here, it’s free.
• Therapeutics company Halozyme Therapeutics (NASDAQ: HALO) jumped 4.3%. Is now the time to buy Halozyme Therapeutics? Access our full analysis report here, it’s free.
• Healthcare Technology for Providers company Privia Health (NASDAQ: PRVA) jumped 4.6%. Is now the time to buy Privia Health? Access our full analysis report here, it’s free.

Zooming In On RadNet (RDNT)

RadNet’s shares are somewhat volatile and have had 14 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 biggest move we wrote about over the last year was 3 months ago when the stock gained 5.8% on the news that comments from a key Federal Reserve official bolstered hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.

RadNet is down 1.7% since the beginning of the year, and at $69.77 per share, it is trading 17.4% below its 52-week high of $84.48 from November 2025. Investors who bought $1,000 worth of RadNet’s shares 5 years ago would now be looking at an investment worth $3,759.

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