What Happened?
A number of stocks jumped in the afternoon session after Treasury yields retreated below 5% and oil prices declined, sparking a recovery across growth-oriented equities following the Federal Reserve's interest rate increase.
The benchmark 10-year Treasury yield dropped to 4.949%, alleviating pressure on borrowing costs and valuation multiples per CNBC. Technology and semiconductor stocks had faced sharp selling in the prior session after the Federal Reserve unanimously raised its benchmark interest rate by 25 basis points to a target range of 3.75% to 4.00%. Lower yields often provide a tailwind for technology companies, whose high-growth valuations are sensitive to the discount rates applied to projected earnings.
Additionally, falling energy prices eased worries regarding persistent inflation, helping major stock indices rebound from their post-announcement declines.
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:
- Content Delivery company Fastly (NASDAQ: FSLY) jumped 3.8%. Is now the time to buy Fastly? Access our full analysis report here, it’s free.
- Data Infrastructure company Oracle (NYSE: ORCL) jumped 4.7%. Is now the time to buy Oracle? Access our full analysis report here, it’s free.
Zooming In On Oracle (ORCL)
Oracle’s shares are extremely volatile and have had 37 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 14 days ago when the stock gained 5.4% on the news that software equities broadly gained momentum following a pullback in treasury yields and second-quarter financial results from Snowflake. Lower Treasury yields supported the move after Fed Governor Christopher Waller signaled support for keeping rates steady. The 10-year yield fell to 4.756%, while the 2-year yield declined to 4.328%, according to CNBC. Because software valuations are heavily based on cash flows expected years into the future, lower yields reduce the discount rate applied to those earnings and can increase the value investors assign to the group today. Snowflake surged after reporting earnings and increasing its forward outlook, sparking widespread optimism across the enterprise software industry. Taking a closer look at the quarter, SNOW’s revenue reached $1.55 billion, up 35% year on year, driven by product revenue of $1.48 billion, which grew 37%, the company reported in an official press release. The upbeat report bolstered investor sentiment regarding enterprise tech demand and software spending.
Oracle is down 23.5% since the beginning of the year, and at $149.69 per share, it is trading 54.4% below its 52-week high of $328.15 from September 2025. Despite the year-to-date decline, investors who bought $1,000 worth of Oracle’s shares 5 years ago would now be looking at an investment worth $1,733.
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