The Food and Drug Administration's move to temporarily halt the rollout of Johnson & Johnson's (JNJ -1.10%) COVID-19 vaccine sparked a rally in so-called stay-at-home stocks on Tuesday.
The FDA said it would ask states to pause their administration of J&J's drug while it reviews data involving six reported U.S. cases of a "rare and severe type of blood clot in individuals after receiving the vaccine." The regulatory agency noted that these incidents were "extremely rare," and it was recommending a pause in the use of J&J's vaccine "out of an abundance of caution."
Still, the news prompted many investors to rotate out of stocks poised to profit from a post-pandemic economic recovery and into companies that could benefit from a slower vaccine rollout schedule. This rotation helped to drive up the share prices of home-based fitness star Peloton, telehealth provider Teladoc, and e-signature leader DocuSign.
Powerful trends -- such as the rise of virtual healthcare services, in-home fitness, and remote work -- should continue to fuel Teladoc, Peloton, and DocuSign's growth long after the COVID-19 crisis subsides. So, while today's vaccine news may be providing a short-term boost to their stock prices, it's these core growth drivers that will ultimately power investors' long-term returns.