What Happened?
A number of stocks fell in the afternoon session after a key inflation report showed producer prices surged more than anticipated in April.
The U.S. Bureau of Labor Statistics reported that the Producer Price Index (PPI), which measures inflation before it reaches consumers, jumped 1.4% for the month. This was the largest monthly increase since March 2022. On an annual basis, producer prices rose 6%, the highest since December 2022, partly driven by elevated energy costs.
This hotter-than-expected data suggested that inflationary pressures might persist in the supply chain, which could lead companies to pass on higher costs to customers. Such trends often attract the attention of the Federal Reserve and influence future monetary policy decisions, creating uncertainty for investors.
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:
- Business Process Outsourcing & Consulting company CRA (NASDAQ: CRAI) fell 3.5%. Is now the time to buy CRA? Access our full analysis report here, it’s free.
- Government & Technical Consulting company SAIC (NASDAQ: SAIC) fell 4.5%. Is now the time to buy SAIC? Access our full analysis report here, it’s free.
- Specialized Technology company OSI Systems (NASDAQ: OSIS) fell 4.2%. Is now the time to buy OSI Systems? Access our full analysis report here, it’s free.
- IT Services & Consulting company EPAM (NYSE: EPAM) fell 3.9%. Is now the time to buy EPAM? Access our full analysis report here, it’s free.
- IT Services & Consulting company Kyndryl (NYSE: KD) fell 4.8%. Is now the time to buy Kyndryl? Access our full analysis report here, it’s free.
Zooming In On Kyndryl (KD)
Kyndryl’s shares are very volatile and have had 20 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 26 days ago when the stock gained 3.4% on the news that Iran announced the reopening of the Strait of Hormuz, easing international tensions and providing a much-needed boost to corporate IT spending outlooks.
Many IT service providers rely on long-term contracts that are sensitive to the global macroeconomic climate. With the threat of a prolonged Middle East conflict receding, enterprise clients are more likely to commit to multi-year digital transformation projects and cloud migration initiatives.
The sector also benefits from improved labor mobility and reduced operational costs as global travel becomes less risky for specialized consultants. As inflation expectations moderate alongside oil prices, IT firms can more accurately forecast their wage and overhead expenses. This clarity is driving investor interest back into the sector as a reliable play on global productivity growth.
Kyndryl is down 57% since the beginning of the year, and at $10.97 per share, it is trading 74.7% below its 52-week high of $43.41 from July 2025. Investors who bought $1,000 worth of Kyndryl’s shares at the IPO in October 2021 would now be looking at an investment worth $269.08.
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