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:

• Health Insurance Providers company Molina Healthcare (NYSE:MOH) fell 5.3%. Is now the time to buy Molina Healthcare? Access our full analysis report here, it’s free.
• Outpatient & Specialty Care company Encompass Health (NYSE:EHC) fell 6%. Is now the time to buy Encompass Health? Access our full analysis report here, it’s free.
• Testing & Diagnostics Services company RadNet (NASDAQ:RDNT) fell 5%. Is now the time to buy RadNet? Access our full analysis report here, it’s free.
• Healthcare Technology for Providers company Evolent Health (NYSE:EVH) fell 5.6%. Is now the time to buy Evolent Health? Access our full analysis report here, it’s free.
• Advertising & Marketing Services company Ibotta (NYSE:IBTA) fell 5%. Is now the time to buy Ibotta? Access our full analysis report here, it’s free.

Zooming In On Encompass Health (EHC)

Encompass Health’s shares are not very volatile and have only had 3 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.

Encompass Health is up 4.6% since the beginning of the year, and at $96.12 per share, it is trading close to its 52-week high of $103.77 from November 2024. Investors who bought $1,000 worth of Encompass Health’s shares 5 years ago would now be looking at an investment worth $1,426.

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