What Happened?
A number of stocks fell in the afternoon session after the U.S. Commerce Department initiated a national security investigation into medical equipment and devices, raising concerns about potential tariffs.
The probe, conducted under Section 232 of the Trade Expansion Act, examines whether imports of items like syringes, infusion pumps, and surgical instruments pose a national security risk. Such investigations can pave the way for new import duties, creating a significant overhang for the sector. The goal of potential tariffs would be to boost domestic manufacturing by increasing the cost of foreign goods. This development has introduced new uncertainty for the industry, leading to broad-based declines in the stocks of major manufacturers, including Baxter International and GE HealthCare, as investors weigh the potential impact on supply chains and costs.
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:
- Clover Health (NASDAQ: CLOV) fell 3.1%. Is now the time to buy Clover Health? Access our full analysis report here, it’s free.
- GoodRx (NASDAQ: GDRX) fell 2.6%. Is now the time to buy GoodRx? Access our full analysis report here, it’s free.
- Cardinal Health (NYSE: CAH) fell 4.9%. Is now the time to buy Cardinal Health? Access our full analysis report here, it’s free.
- McKesson (NYSE: MCK) fell 4.8%. Is now the time to buy McKesson? Access our full analysis report here, it’s free.
- Humana (NYSE: HUM) fell 2.9%. Is now the time to buy Humana? Access our full analysis report here, it’s free.
Zooming In On Cardinal Health (CAH)
Cardinal 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.
Cardinal Health is up 25.4% since the beginning of the year, but at $147.97 per share, it is still trading 11.9% below its 52-week high of $168 from June 2025. Investors who bought $1,000 worth of Cardinal Health’s shares 5 years ago would now be looking at an investment worth $3,120.
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