What Happened?

A number of stocks fell in the afternoon session after markets pulled back, reversing early gains, as investor sentiment remained cautious despite a softer-than-expected inflation reading. 

Stocks rose in the morning session after an unexpected drop in the Producer Price Index (PPI) for August signaled easing inflation and raised expectations for a potential Federal Reserve interest rate cut. The U.S. Bureau of Labor Statistics reported that the PPI, which measures wholesale prices, edged down 0.1% last month, contrary to analyst expectations for a 0.3% rise. This data gives the Federal Reserve more flexibility to consider lowering interest rates to stimulate the economy.

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:

• Identity Management company Okta (NASDAQ: OKTA) fell 4.2%. Is now the time to buy Okta? Access our full analysis report here, it’s free.
• Project Management Software company Asana (NYSE: ASAN) fell 4.6%. Is now the time to buy Asana? Access our full analysis report here, it’s free.
• Cloud Monitoring company PagerDuty (NYSE: PD) fell 3.9%. Is now the time to buy PagerDuty? Access our full analysis report here, it’s free.
• Automation Software company Appian (NASDAQ: APPN) fell 4.9%. Is now the time to buy Appian? Access our full analysis report here, it’s free.
• Data Analytics company Health Catalyst (NASDAQ: HCAT) fell 3.5%. Is now the time to buy Health Catalyst? Access our full analysis report here, it’s free.

Zooming In On Appian (APPN)

Appian’s shares are very volatile and have had 22 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 4.4% on the news that MongoDB reported impressive earnings report. The data analytics company saw its shares jump nearly 40% after announcing much stronger-than-expected results, including a revenue beat and an optimistic outlook for the upcoming quarter. This performance suggested robust demand for its cloud-based database services, leading investors to believe the broader data storage and SaaS sectors are experiencing similar health. The positive sentiment created a ripple effect, with peers like DigitalOcean and Snowflake also seeing significant gains and outperforming the general market.

Appian is down 6.9% since the beginning of the year, and at $30.90 per share, it is trading 25.6% below its 52-week high of $41.56 from November 2024. Investors who bought $1,000 worth of Appian’s shares 5 years ago would now be looking at an investment worth $538.52.

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