What Happened?

A number of stocks fell in the afternoon session after hotter-than-expected inflation data and rising concerns over credit risk rattled investors. January's Producer Price Index (PPI), a measure of wholesale inflation, rose 0.5% against expectations of 0.3%, with the core component jumping 0.8%. This report fuels the narrative of "sticky inflation," suggesting the Federal Reserve may have limited room to cut interest rates. 

Compounding these worries are growing anxieties in the credit markets. According to a Bank of America strategist, problem loans are an increasing concern that could pressure lenders. Investors are reassessing credit risk, particularly in private-credit and leveraged-loan markets, weighing on the valuations of banks sensitive to the economic cycle.

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:

• Regional Banks company UMB Financial (NASDAQ: UMBF) fell 7%. Is now the time to buy UMB Financial? Access our full analysis report here, it’s free.
• Regional Banks company Texas Capital Bank (NASDAQ: TCBI) fell 6.8%. Is now the time to buy Texas Capital Bank? Access our full analysis report here, it’s free.
• Regional Banks company Simmons First National (NASDAQ: SFNC) fell 6.6%. Is now the time to buy Simmons First National? Access our full analysis report here, it’s free.
• Regional Banks company Pinnacle Financial Partners (NASDAQ: PNFP) fell 7.5%. Is now the time to buy Pinnacle Financial Partners? Access our full analysis report here, it’s free.
• Regional Banks company Old National Bank (NASDAQ: ONB) fell 6.7%. Is now the time to buy Old National Bank? Access our full analysis report here, it’s free.

Zooming In On Pinnacle Financial Partners (PNFP)

Pinnacle Financial Partners’s shares are somewhat volatile and have had 11 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 7 months ago when the stock dropped 11.6% on the news that it announced it would merge with Synovus Financial in an $8.6 billion all-stock transaction. The negative reaction stemmed from several concerns. Analysts pointed out that investors might have hoped for a buyout from a larger bank, which likely would have commanded a higher premium. The deal's structure also caused apprehension, with reports highlighting a potential 9% dilution in tangible book value and the complexities of integrating the two companies.

Pinnacle Financial Partners is down 4.5% since the beginning of the year, and at $90.79 per share, it is trading 24.1% below its 52-week high of $119.63 from July 2025. Investors who bought $1,000 worth of Pinnacle Financial Partners’s shares 5 years ago would now be looking at an investment worth $1,101.

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