What happened 

Shares of video-streaming platform provider Roku (ROKU 1.36%) dropped 3.5% this morning as investors processed the latest inflation data. But by midafternoon, the stock had reversed course and was making some gains, likely on the news that the company is launching a line of smart-home products. 

As of 2:18 p.m. ET, the video-streaming stock was up by 0.7%.

So what 

Roku started out the trading day by falling sharply after the latest Bureau of Labor Statistics data showed that the producer price index rose 0.4% for September, which was much higher than the 0.2% increase that most analysts were expecting.

Two people holding a bowl of popcorn and a remote control while sitting on a couch.

Image source: Getty Images.

The Federal Reserve is keeping close tabs on all inflation data and the producer price index ticking higher means that the Fed now has more of a reason to continue hiking interest rates. That appeared to make Roku investors nervous, sending its share price falling. 

But the stock slightly rebounded after investors processed the news that Roku is launching a line of smart-home products that will be available in Walmart stores. 

The company said that it will start selling a line of security cameras, video doorbells, lighting, and smart plugs in Walmart stores next week, with some of the devices also available on Walmart's and Roku's websites.

"As the #1 selling smart TV OS in the U.S., the Roku platform is used by tens of millions of households, and now we're extending our ecosystem to include devices and services to power the modern smart home," Roku's president of devices, Mustafa Ozgen, said in a press release. 

Now what 

Investors will certainly want to keep a close eye on Roku's smart-home device sales in the coming quarters. The company's main focus has been on growing its platform and advertising revenue, so the new devices could either be a distraction for the business, or a way to tap a new revenue stream.

Regardless, it'll likely be a few quarters before investors get a clear picture of how well the devices are selling and how well they integrate into Roku's existing ecosystem

In the meantime, Roku's shares are likely to remain at least somewhat volatile as investors continue to weigh how rising inflation -- and the Fed's moves to tame it -- will affect the economy.