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:

• Health Insurance Providers company Cencora (NYSE: COR) jumped 2.6%. Is now the time to buy Cencora? Access our full analysis report here, it’s free.
• Drug Development Inputs & Services company Azenta (NASDAQ: AZTA) jumped 2.9%. Is now the time to buy Azenta? Access our full analysis report here, it’s free.
• Senior Health, Home Health & Hospice company The Pennant Group (NASDAQ: PNTG) jumped 2.8%. Is now the time to buy The Pennant Group? Access our full analysis report here, it’s free.
• Outpatient & Specialty Care company LifeStance Health Group (NASDAQ: LFST) jumped 2.8%. Is now the time to buy LifeStance Health Group? Access our full analysis report here, it’s free.
• Therapeutics company Gilead Sciences (NASDAQ: GILD) jumped 3.1%. Is now the time to buy Gilead Sciences? Access our full analysis report here, it’s free.

Zooming In On Gilead Sciences (GILD)

Gilead Sciences’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.

The biggest move we wrote about over the last year was 6 months ago when the stock gained 8.7% on the news that the company reported second-quarter 2025 results that topped Wall Street's expectations and raised its full-year financial guidance. The biopharmaceutical company posted revenue of $7.08 billion and adjusted earnings per share (EPS) of $2.01, beating analysts' consensus estimates for both figures. Buoyed by the results, Gilead raised its full-year adjusted EPS guidance to a midpoint of $8.10. While it also slightly lifted its full-year revenue guidance to $28.5 billion, this figure remained just below what analysts were projecting. Investors appeared to focus on the earnings beat and the improved profit outlook for the year, which outweighed the more cautious signal on revenue.

Gilead Sciences is up 27.6% since the beginning of the year, and at $155.12 per share, it is trading close to its 52-week high of $155.80 from February 2026. Investors who bought $1,000 worth of Gilead Sciences’s shares 5 years ago would now be looking at an investment worth $2,394.

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