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:
- Defense Contractors company Parsons (NYSE: PSN) fell 3.6%. Is now the time to buy Parsons? Access our full analysis report here, it’s free.
- Home Construction Materials company Owens Corning (NYSE: OC) fell 3.5%. Is now the time to buy Owens Corning? Access our full analysis report here, it’s free.
- Waste Management company Quest Resource (NASDAQ: QRHC) fell 4.7%. Is now the time to buy Quest Resource? Access our full analysis report here, it’s free.
- Agricultural Machinery company Titan International (NYSE: TWI) fell 4.1%. Is now the time to buy Titan International? Access our full analysis report here, it’s free.
- Marine Transportation company Matson (NYSE: MATX) fell 4.6%. Is now the time to buy Matson? Access our full analysis report here, it’s free.
Zooming In On Quest Resource (QRHC)
Quest Resource’s shares are extremely volatile and have had 42 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 5 months ago when the stock dropped 32.2% on the news that the company reported weak fourth-quarter results as revenue barely grew, missing expectations, and EBITDA declined significantly. The real story was the sharp drop in profitability, with adjusted EBITDA falling by more than half compared to the previous year, weighed down by higher costs, client attrition, and weaker demand in industrial end markets. With earnings pressure mounting, the company announced a 15% workforce reduction and an annualized $3 million cut in operating expenses. The company also named Perry Moss as CEO, signaling a shift in leadership. Overall, this was a disappointing quarter with little revenue growth and weaker earnings.
Quest Resource is down 73.6% since the beginning of the year, and at $1.68 per share, it is trading 81.4% below its 52-week high of $9.04 from September 2024. Investors who bought $1,000 worth of Quest Resource’s shares 5 years ago would now be looking at an investment worth $840.
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