What Happened?
A number of stocks jumped in the afternoon session after positive news on corporate earnings, easing political and trade tensions, and optimism about future interest rate cuts all converged to lift investor sentiment.
The overall market, including the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite, climbed significantly. A major catalyst was Apple shares rising 4% after a firm upgraded its rating, citing improving iPhone demand and predicting a long growth cycle. More broadly, the third-quarter earnings season got off to a strong start, with 76% of the 58 S&P 500 companies beating expectations, lifting the market's mood.
Additionally, there were hope for an end to the ongoing U.S. government shutdown, which is seen as good for the economy. Investors also moved past recent fears over credit risks that had caused a sell-off the previous week, with shares of regional banks rebounding. Finally, signs that trade tensions with China were de-escalating, including expectations that new tariffs might be avoided, added to the overall positive momentum, leading traders to focus on more favorable factors like earnings and potential Federal Reserve rate cuts.
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:
- E-commerce Software company Shopify (NASDAQ: SHOP) jumped 4.2%. Is now the time to buy Shopify? Access our full analysis report here, it’s free for active Edge members.
- Advertising Software company The Trade Desk (NASDAQ: TTD) jumped 5.1%. Is now the time to buy The Trade Desk? Access our full analysis report here, it’s free for active Edge members.
- E-commerce Software company Wix (NASDAQ: WIX) jumped 4%. Is now the time to buy Wix? Access our full analysis report here, it’s free for active Edge members.
- Sales Software company ZoomInfo (NASDAQ: GTM) jumped 3.2%. Is now the time to buy ZoomInfo? Access our full analysis report here, it’s free for active Edge members.
- Lending Software company Upstart (NASDAQ: UPST) jumped 8.6%. Is now the time to buy Upstart? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Upstart (UPST)
Upstart’s shares are extremely volatile and have had 72 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 5 days ago when the stock dropped 0.6% on the news that the company, announced a new partnership with Corporate America Family Credit Union (CAFCU). The collaboration allowed CAFCU, a member-owned financial cooperative, to offer personal loans, home equity lines of credit (HELOCs), and auto refinance loans to more consumers. CAFCU had already started lending as a partner on the Upstart Referral Network for personal loans in the previous month. The credit union also planned to expand into HELOCs and auto refinance loans. The partnership provided CAFCU members with a modern online process, aiming to make borrowing easier and more accessible.
Upstart is down 17.2% since the beginning of the year, and at $50.35 per share, it is trading 43.3% below its 52-week high of $88.77 from February 2025. Investors who bought $1,000 worth of Upstart’s shares at the IPO in December 2020 would now be looking at an investment worth $1,709.
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