What Happened?
A number of stocks fell in the afternoon session after sentiment continued to weaken as tech stocks faced a dual headwind of deteriorating macro conditions and an unwinding of retail leverage. The fundamental pressure stems from a sudden oil shock.
A reinstated U.S. naval blockade on Iran pushed Brent crude past $85 a barrel, raising expectations that the Federal Reserve will hold rates in the 3.50%–3.75% range. For the software sector, this higher cost of capital could drive stricter scrutiny of AI investments. Investors might be hesitant to fund massive, margin-dilutive infrastructure buildouts without a clear timeline for returns.
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:
- Data Storage company MongoDB (NASDAQ: MDB) fell 3%. Is now the time to buy MongoDB? Access our full analysis report here, it’s free.
- Payments Software company Flywire (NASDAQ: FLYW) fell 3%. Is now the time to buy Flywire? Access our full analysis report here, it’s free.
- Payments Software company Marqeta (NASDAQ: MQ) fell 2.3%. Is now the time to buy Marqeta? Access our full analysis report here, it’s free.
Zooming In On Flywire (FLYW)
Flywire’s shares are quite volatile and have had 15 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 2 days ago when the stock gained 5.1% on the news that a soft Producer Price Index (PPI) print reassured investors, countering fears of an industry-wide budget squeeze sparked by IBM a day earlier.
June wholesale inflation fell 0.3% against expectations for a flat reading, layering on top of the previous session's surprisingly sharp 0.4% decline in consumer prices. This consecutive confirmation of cooling inflation shifted market focus away from IBM's warning that clients are engaged in "capex reprioritization"—exhausting their IT budgets to secure supply-constrained AI servers and high-bandwidth memory instead of software.
Lower inflation data directly reduces Treasury yields by taking pressure off the Federal Reserve to hold interest rates high. This provides a mechanical valuation lift to growth stocks, whose valuations rely heavily on future cash flows.
Flywire is up 30.1% since the beginning of the year, and at $18.09 per share, it is trading close to its 52-week high of $18.78 from July 2026. Despite the year-to-date gain, investors who bought $1,000 worth of Flywire’s shares 5 years ago would now be looking at only $596.37.
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