What Happened?

A number of stocks jumped in the afternoon session after markets continued to rally amid growing speculation of an impending interest rate cut by the Federal Reserve. Following a favorable Consumer Price Index (CPI) report, investors are increasingly betting on a rate reduction next month, a sentiment amplified by U.S. Treasury Secretary Scott Bessent's call for a significant cut. This has fueled a 'risk-on' environment across Wall Street. Lower interest rates are typically beneficial for growth-oriented sectors like healthcare, as they reduce the cost of borrowing for research and innovation and increase the present value of future earnings.

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:

• Medical Devices & Supplies - Cardiology, Neurology, Vascular company Penumbra (NYSE: PEN) jumped 3.6%. Is now the time to buy Penumbra? Access our full analysis report here, it’s free.
• Medical Devices & Supplies - Specialty company STAAR Surgical (NASDAQ: STAA) jumped 3.1%. Is now the time to buy STAAR Surgical? Access our full analysis report here, it’s free.
• Surgical Equipment & Consumables - Diversified company CONMED (NYSE: CNMD) jumped 3%. Is now the time to buy CONMED? Access our full analysis report here, it’s free.
• Hospital Chains company Acadia Healthcare (NASDAQ: ACHC) jumped 3.2%. Is now the time to buy Acadia Healthcare? Access our full analysis report here, it’s free.
• Outpatient & Specialty Care company Select Medical (NYSE: SEM) jumped 3.5%. Is now the time to buy Select Medical? Access our full analysis report here, it’s free.

Zooming In On Penumbra (PEN)

Penumbra’s shares are somewhat volatile and have had 10 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 14 days ago when the stock gained 11.8% on the news that the company reported impressive second-quarter financial results that surpassed analyst expectations and raised its full-year revenue forecast. The company posted revenue of $339.5 million, a 13.4% increase year-over-year, which beat the consensus estimate of $327.77 million. Earnings per share also came in strong at $0.86, topping expectations of $0.83. This growth was primarily fueled by its U.S. Thrombectomy business, which involves procedures to remove blood clots and saw a 22.6% revenue jump. The embolization segment, which deals with blocking blood flow for treatment, also performed well. Bolstered by this strong performance, Penumbra lifted its full-year 2025 revenue guidance, signaling confidence in its continued growth trajectory.

Penumbra is up 8.2% since the beginning of the year, but at $259.58 per share, it is still trading 14.5% below its 52-week high of $303.76 from February 2025. Investors who bought $1,000 worth of Penumbra’s shares 5 years ago would now be looking at an investment worth $1,087.

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