ZM - Why Cloud Stocks Were Down Today
Cloud software stocks, including Okta (NASDAQ: OKTA) , Zoom Video Communications (NASDAQ: ZM) , and Appian (NASDAQ: APPN) , were falling today after August's inflation reading came in hotter than expected.
The inflation report makes it more likely that the Federal Reserve will raise interest rates by 75 basis points at its meeting next week, which in turn increases the chances of a recession, as the Fed's goal is to bring inflation under control, even if that means cooling off the economy.
Growth stocks like these three tend to be more volatile than the broad market, and investors have turned away from unprofitable stocks like Appian and Okta due to fears of a recession and as rising interest rates have made long-dated earnings less valuable.
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Why Cloud Stocks Were Down Today