5 Stocks Down 30%+: The PPI Sell-Off & What to Watch

The day's market tone was set by a single, jarring data point. The U.S. Producer Price Index (PPI) for January came in at 0.5%, a significant jump from the 0.3% consensus forecast. This hotter-than-expected print suggested inflationary pressures in the supply chain are more persistent than hoped, immediately dampening investor optimism for near-term Federal Reserve rate cuts.

The reaction was swift and broad. Traders adjusted to the possibility of interest rates staying higher for longer, triggering a broad sell-off across the market. Financials, in particular, were under immediate pressure. This context is critical: the five stocks that fell 30%+ were not reacting to company-specific news. They were caught in a sector-wide "risk-off" wave.

Zooming in on the investment banking sector, the impact was stark. Despite collectively reporting strong fourth-quarter results, the group's momentum was erased. On average, share prices are down 4.6% since the latest earnings results. The hot PPI data acted as a powerful reset button, overriding the positive Q4 beats and shifting the entire sector's forward view. This wasn't a sector rotation; it was a forced re-rating down.

The Individual Breakdown: Why Each Stock Dropped

The sector-wide sell-off created a messy tapestry of price action. Let's cut through the noise and separate the real pain from the accounting illusions.

First, Ally Financial's 6.3% drop is a pure PPI reaction. The auto lender has no specific earnings or operational drama to explain this. It's a textbook case of a broad risk-off move hitting a financial stock, as the hotter inflation data directly pressures the sector's valuation multiples.

Then there's Stifel, where the math is the story. The stock appeared to crash 5.3% on the surface, but that's largely an illusion. The real driver was a three-for-two stock split that began trading split-adjusted yesterday. This mechanical adjustment makes the per-share price look lower, but the total value of your holdings hasn't changed. The underlying fundamentals remain strong, with record Q4 revenue and solid growth guidance. The sell-off here is a technical artifact, not a fundamental breakdown.

Perella Weinberg presents a different kind of pressure. The firm is heading into its own earnings report this Friday, and the setup is fragile. It already missed revenue expectations by 8.4% last quarter, and analysts are now expecting a 23.9% year-on-year revenue decline this time. That's a reversal from growth and a clear headwind. The 5.3% drop is a preemptive strike, as the market prices in another potential miss against a backdrop of a weak sector.

Finally, Moelis and Piper Sandler are caught in the sector's average slump. Both are part of the group that saw strong Q4 results but are now down 4.6% on average since those beats. Moelis itself is down 9.7% from its report. This is the core dynamic: even solid companies are getting dragged down by the broader sector re-rating. Piper Sandler, like Moelis, is part of this stressed environment, with its own 7.4% drop reflecting the group's weakness.

The Bottom Line: The 30%+ sell-off is a myth. The real story is a mix of a pure PPI shock (Ally), a mechanical split illusion (Stifel), earnings pressure (Perella Weinberg), and sector-wide drag (Moelis, Piper Sandler). For investors, the signal is clear: look past the headline percentages and dig into the specific catalysts.

Sector-Wide Context & The Earnings Reality Check

The market's reaction today is a classic case of sentiment overriding substance. On the surface, the sell-off in investment banks is brutal. But look at the underlying performance, and the disconnect is glaring.

The sector's Q4 was a powerhouse. As a group, investment banks and brokerages revenues beat analysts' consensus estimates by 5.9% and their forward guidance was in line. This is the kind of fundamental strength that should support prices. Yet, despite this collective beat, the stocks are down 4.6% on average since their latest earnings results. The hot PPI data acted as a sledgehammer, resetting the entire sector's valuation multiple and erasing the momentum from strong results. This is the reality of a risk-off environment: good news gets ignored when the macro picture darkens.

For some firms, this is a temporary drag. For others, it's a critical test. Take Perella Weinberg. The firm actually had a stellar quarter, beating revenue estimates by 27.7% last time. But that was a high bar. This Friday's report is a make-or-break moment. Analysts are now expecting a 23.9% year-on-year revenue decline to $171.6 million, a stark reversal from growth. The stock is already down 5.3% on the news, showing the market is pricing in a repeat of last quarter's miss. The upcoming earnings will be the ultimate reality check: can they defy the sector-wide slump and deliver a beat against a backdrop of expected weakness?

The bottom line is that the sector's strong fundamentals are being temporarily buried. The PPI sell-off is a sector-wide reset, not a fundamental breakdown. But for firms like Perella Weinberg, the path forward is narrow. They must deliver a surprise to climb out of the sector's average slump. Watch that Friday report like a hawk.

Catalysts & What to Watch: Separating Signal from Noise

The sell-off is over. The real work begins: separating the temporary noise from the real signals. For investors, the path forward is clear. Watch these three catalysts to see if these dips are buying opportunities or warnings.

First, for Ally Financial, the key is execution. The stock is down 15.6% from its 52-week high, a clear pullback after a volatile week. The market is questioning its return profile after a Q4 revenue miss. Your watchpoint: the next earnings report. Can Ally demonstrate cleaner execution and prove its auto lending strength is translating to durable profitability? Until then, the vulnerability remains.

Second, for Perella Weinberg, Friday's earnings are a binary event. The firm already missed last quarter and is expected to see a 23.9% year-on-year revenue decline. The stock is pricing in another miss. Your watchpoint: the actual print. A beat would be a powerful reversal signal, confirming the sector's weak trend is not catching them. A miss would confirm the warning. This report will define the stock's near-term trajectory.

Third, for Stifel Financial, ignore the split-adjusted price. The 37% drop is a math illusion from its three-for-two stock split. The real story is in the fundamentals. The firm posted record Q4 revenue and solid 2026 guidance. Your watchpoint: the stock's reaction post-split. If it stabilizes and trades on its strong underlying performance, the sell-off was a technical artifact. If it continues to drift, the broader sector pressure is real.

The bottom line: the PPI sell-off reset the table, but fundamentals still matter. Watch these catalysts to see which stocks are just catching a cold and which are truly sick.