What Happened?
A number of stocks fell in the morning session after the major indices pulled back as the Bureau of Labor Statistics reported a hotter-than-expected September inflation print, pushing Treasury yields higher.
The consumer price index rose 3.7% year-over-year in September, topping the 3.6% estimate from economists polled by Dow Jones. Core inflation, which excludes volatile food and energy costs, climbed 2.6% annually against expectations of 2.5%. Following the print, the 10-year Treasury yield climbed over six basis points to 5.278%, while the 30-year yield advanced past 5.59%, per CNBC market data. Rising yields intensify pressure on equity valuations as third-quarter corporate earnings get underway. In remarks carried by CNBC, Franklin Templeton Institute head investment strategist Jeff Schulze noted that pressure across the long end of the curve acts as a valuation headwind for risk assets. Higher benchmark yields mechanically elevate the discount rate applied to corporate earnings, compressing the multiples investors are willing to pay for equities. When sticky inflation dampens expectations for monetary easing, the repricing falls heaviest on high-multiple growth sectors whose projected cash flows sit furthest in the future.
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:
- Advertising Software company PubMatic (NASDAQ: PUBM) fell 2.7%. Is now the time to buy PubMatic? Access our full analysis report here, it’s free.
- Communications Platform company Bandwidth (NASDAQ: BAND) fell 6.4%. Is now the time to buy Bandwidth? Access our full analysis report here, it’s free.
- Network Security company Palo Alto Networks (NASDAQ: PANW) fell 5.1%. Is now the time to buy Palo Alto Networks? Access our full analysis report here, it’s free.
- Design Software company Unity (NYSE: U) fell 6.8%. Is now the time to buy Unity? Access our full analysis report here, it’s free.
- Video Conferencing company Five9 (NASDAQ: FIVN) fell 2.5%. Is now the time to buy Five9? Access our full analysis report here, it’s free.
Zooming In On Unity (U)
Unity’s shares are extremely volatile and have had 50 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 13 days ago when the stock gained 7% on the news that strength across artificial intelligence and technology equities helped lift major market averages, offsetting macroeconomic headwinds from Treasury yields near 24-year highs.
Equities showed resilience as strong investor appetite for artificial intelligence hardware and software providers pushed the sector higher for a second straight session. The momentum in tech shares helped counterbalance significant pressure stemming from benchmark Treasury yields trading around multi-decade highs alongside rising crude oil prices. Typically, higher yields elevate financing costs and weigh on the valuations of growth-oriented companies. However, market participants remained focused on underlying enterprise AI adoption, evaluating incoming corporate earnings reports, and awaiting key macroeconomic data, including the upcoming jobs report.
Unity is down 1.8% since the beginning of the year, and at $43.48 per share, it is trading 12.1% below its 52-week high of $49.47 from December 2025. Investors who bought $1,000 worth of Unity’s shares 5 years ago would now be looking at only $307.54.
WHILE YOU’RE HERE: The Next Palantir? One satellite company captures images of every point on Earth. Every single day. The Pentagon wants it. Hedge funds are using it to beat earnings. You’ve probably never heard of it.
This is what the early days of Palantir looked like before it became a giant. Same playbook. Different technology. If you missed Palantir, you need to see this. Claim The Stock Ticker for Free HERE.
