What Happened?
A number of stocks fell in the afternoon session after markets pulled back, reversing early gains, as investor sentiment remained cautious despite a softer-than-expected inflation reading.
Stocks rose in the morning session after an unexpected drop in the Producer Price Index (PPI) for August signaled easing inflation and raised expectations for a potential Federal Reserve interest rate cut. The U.S. Bureau of Labor Statistics reported that the PPI, which measures wholesale prices, edged down 0.1% last month, contrary to analyst expectations for a 0.3% rise. This data gives the Federal Reserve more flexibility to consider lowering interest rates to stimulate the economy.
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:
- Advertising & Marketing Services company Interpublic Group (NYSE: IPG) fell 2.5%. Is now the time to buy Interpublic Group? Access our full analysis report here, it’s free.
- Professional Staffing & HR Solutions company Kforce (NYSE: KFRC) fell 3.1%. Is now the time to buy Kforce? Access our full analysis report here, it’s free.
- Professional Staffing & HR Solutions company Insperity (NYSE: NSP) fell 4.9%. Is now the time to buy Insperity? Access our full analysis report here, it’s free.
- Digital Media & Content Platforms company WEBTOON (NASDAQ: WBTN) fell 6.4%. Is now the time to buy WEBTOON? Access our full analysis report here, it’s free.
- Digital Media & Content Platforms company Ziff Davis (NASDAQ: ZD) fell 4.3%. Is now the time to buy Ziff Davis? Access our full analysis report here, it’s free.
Zooming In On WEBTOON (WBTN)
WEBTOON’s shares are extremely volatile and have had 37 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 5 days ago when the stock dropped 2.5% after the release of the August jobs report, which showed the U.S. economy added far fewer jobs than anticipated, fueling concerns about a broader economic slowdown. The U.S. economy added only 22,000 jobs in August, significantly missing economists' expectations. The unemployment rate also ticked up to 4.3%, its highest level since 2021. This report is the latest evidence of a cooling labor market amid economic uncertainty and restrictive tariff policies. Key sectors experienced job losses, including manufacturing, federal government, and business services. In contrast, the health services sector continued to show growth. While the weak data raises alarms about the health of the economy, it has also strengthened market expectations that the Federal Reserve will cut interest rates at its upcoming meeting to provide support.
WEBTOON is up 4.6% since the beginning of the year, but at $14.21 per share, it is still trading 16.2% below its 52-week high of $16.96 from August 2025. Investors who bought $1,000 worth of WEBTOON’s shares at the IPO in June 2024 would now be looking at an investment worth $617.83.
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