What Happened?

A number of stocks fell in the pre-market session after an unexpectedly sharp rise in wholesale inflation fueled concerns about rising costs and their impact on corporate profits. The primary catalyst was the July 2025 Producer Price Index (PPI), a measure of inflation at the wholesale level, which jumped 0.9% against forecasts of a 0.2% rise. This represents the most significant monthly increase in over three years, pointing to mounting cost pressures for manufacturers, with tariffs cited as a key factor. This data complicates the Federal Reserve's upcoming interest rate decisions, as persistent inflation may prevent rate cuts, creating a headwind for cyclical sectors like Industrials.

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:

• Home Builders company Lennar (NYSE: LEN) fell 3.7%. Is now the time to buy Lennar? Access our full analysis report here, it’s free.
• Home Builders company D.R. Horton (NYSE: DHI) fell 3.6%. Is now the time to buy D.R. Horton? Access our full analysis report here, it’s free.
• Home Builders company LGI Homes (NASDAQ: LGIH) fell 3.8%. Is now the time to buy LGI Homes? Access our full analysis report here, it’s free.
• Renewable Energy company Enphase (NASDAQ: ENPH) fell 6.9%. Is now the time to buy Enphase? Access our full analysis report here, it’s free.
• Renewable Energy company EVgo (NASDAQ: EVGO) fell 4.7%. Is now the time to buy EVgo? Access our full analysis report here, it’s free.

Zooming In On Enphase (ENPH)

Enphase’s shares are extremely volatile and have had 46 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 7 days ago when the stock gained 5.8% on the news that its President and CEO, Badrinarayanan Kothandaraman, disclosed the purchase of 5,000 shares of company stock, signaling strong confidence in the firm's outlook. The transaction, valued at approximately $154,100, was detailed in a regulatory filing. Investors often viewed such a substantial investment by a key executive as a bullish indicator for a company's future prospects. The purchase provided a positive boost for the stock, happening even as some analysts recently expressed a more cautious outlook on the company, including a price target reduction.

Enphase is down 55.2% since the beginning of the year, and at $31.94 per share, it is trading 74.2% below its 52-week high of $123.65 from August 2024. Investors who bought $1,000 worth of Enphase’s shares 5 years ago would now be looking at an investment worth $436.58.

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