A number of stocks jumped in the afternoon session after the SaaS sector continued to rally as favorable inflation data bolstered hopes for a Federal Reserve interest rate cut. This optimism was largely driven by a benign July Consumer Price Index (CPI) report, which solidified investor expectations for a Federal Reserve interest rate cut. Following the release of the inflation data, which showed a year-over-year increase of 2.7%, the probability of a rate cut in September surged to over 96%. Lower interest rates are typically beneficial for growth-oriented technology stocks, as they can reduce borrowing costs and increase the present value of future earnings. Adding to the positive sentiment was a 90-day delay in the imposition of higher tariffs on Chinese goods, which reduced trade-related uncertainty for the technology sector.
A number of stocks jumped in the afternoon session after cooler-than-expected inflation data ignited investor optimism for a potential Federal Reserve interest rate cut. The July Consumer Price Index (CPI) report, an important measure of inflation, came in cooler than expected, showing prices holding steady at an annual rate of 2.7%. This data has led to speculation that the Federal Reserve might lower interest rates. For growth-focused sectors like SaaS, lower interest rates are particularly beneficial as they increase the present value of companies' future earnings, making their stocks more appealing.
Project management software maker Monday.com (NASDAQ:MNDY) reported Q2 CY2025 results exceeding the market’s revenue expectations, with sales up 26.6% year on year to $299 million. The company expects next quarter’s revenue to be around $312 million, close to analysts’ estimates. Its non-GAAP profit of $1.09 per share was 27% above analysts’ consensus estimates.
Wondering how the US markets performed one hour before the close of the markets on Monday? Discover the movers and shakers of today's session in our comprehensive analysis.
Shares of project management software maker Monday.com (NASDAQ:MNDY)
fell 26.5% in the morning session after the company reported second-quarter results that beat analyst estimates but issued a weaker-than-expected revenue outlook for the third quarter. The main concern for investors was the company's third-quarter revenue guidance of $311 million to $313 million. The midpoint of this range fell just short of Wall Street's forecast and signaled a potential slowdown in growth. This overshadowed the company's revenue and profit beats in the second quarter. Adding to investor concerns, profitability weakened, with the GAAP operating margin falling to -3.9% from 0.8% in the same quarter last year. The company's free cash flow margin also decreased year on year to 20.1%. These negative forward-looking indicators and weakening margins prompted a significant sell-off in the stock, despite an otherwise solid quarter.
