What Happened?

A number of stocks jumped in the afternoon session after markets continued to rally as a surprisingly subdued inflation report fueled hopes for an imminent interest rate cut from the U.S. Federal Reserve. The July Consumer Price Index (CPI) report showed a year-over-year increase of 2.7%, which was slightly below market expectations. This tamer-than-expected inflation data was viewed by investors as a key signal that price pressures are easing. As a result, the market has strengthened its conviction that the U.S. Federal Reserve will implement an interest rate cut in September. The prospect of lower borrowing costs tends to boost corporate profitability and can stimulate economic activity, creating a more favorable environment for consumer-facing companies and fueling a broad-based market rally.

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:

• Personal Care company e.l.f. Beauty (NYSE: ELF) jumped 5.4%. Is now the time to buy e.l.f. Beauty? Access our full analysis report here, it’s free.
• Personal Care company Edgewell Personal Care (NYSE: EPC) jumped 3.8%. Is now the time to buy Edgewell Personal Care? Access our full analysis report here, it’s free.
• Personal Care company Herbalife (NYSE: HLF) jumped 6.7%. Is now the time to buy Herbalife? Access our full analysis report here, it’s free.
• Personal Care company Olaplex (NASDAQ: OLPX) jumped 5.5%. Is now the time to buy Olaplex? Access our full analysis report here, it’s free.
• Personal Care company BeautyHealth (NASDAQ: SKIN) jumped 3.4%. Is now the time to buy BeautyHealth? Access our full analysis report here, it’s free.

Zooming In On Herbalife (HLF)

Herbalife’s shares are extremely volatile and have had 32 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 6 months ago when the stock gained 44.6% on the news that the company reported impressive fourth-quarter results, which blew past analysts' EPS and EBITDA estimates. On the other hand, revenue guidance for the next quarter missed expectations, with sales projected to decline between 5.5% and 1.5% y/y. Full-year EBITDA guidance also fell short of Wall Street's estimates, raising concerns about the company's ability to sustain its margins and profits. Overall, this was a solid quarter. Separately, the company announced that Stephan Gratziani is stepping into the CEO's chair, replacing Michael Johnson, who will transition to the role of Executive Chairman.

Herbalife is up 37.6% since the beginning of the year, but at $9.19 per share, it is still trading 15.1% below its 52-week high of $10.83 from July 2025. Investors who bought $1,000 worth of Herbalife’s shares 5 years ago would now be looking at an investment worth $193.03.

Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.