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:
- Lending Software company Upstart (NASDAQ: UPST) fell 5.9%. Is now the time to buy Upstart? Access our full analysis report here, it’s free.
- Automation Software company SoundHound AI (NASDAQ: SOUN) fell 4.5%. Is now the time to buy SoundHound AI? Access our full analysis report here, it’s free.
- Content Delivery company Fastly (NASDAQ: FSLY) fell 4%. Is now the time to buy Fastly? Access our full analysis report here, it’s free.
Zooming In On Upstart (UPST)
Upstart’s shares are extremely volatile and have had 51 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 9 days ago when the stock gained 6.2% on the news that the company released its September 2026 monthly loan origination volume of $1,378.3 million and reported an update indicating an improvement to its proprietary credit risk metric, the Upstart Macro Index, according to a company press release.
According to the corporate disclosure, the Upstart Macro Index reading fell to 1.49 as of October 5, 2026, down slightly from 1.50 in the prior month. The company press release noted that this index estimates the impact of the macroeconomy on credit losses for Upstart-powered loans, with a 1.49 reading indicating default risk is approximately 49% above what the firm expects in a normal economy benchmarked at 1.0.
Furthermore, Upstart stated that while the index has remained above 1.0 since early 2022, it remains well below its historical peak of 1.68 reached in 2024. Regarding loan volume, the company reported that originations in September averaged $53.1 million across 25.95 funding days, up from $50.7 million per day in August. The corporate filing detailed that this daily acceleration brought cumulative third-quarter originations to $4,117.8 million across 79.85 funding days. Consequently, these lower macroeconomic default expectations could encourage capital partners to deploy funds, directly lifting high-margin loan facilitation fees for Upstart.
Upstart is down 50.8% since the beginning of the year, and at $22.56 per share, it is trading 57.2% below its 52-week high of $52.74 from October 2025. Investors who bought $1,000 worth of Upstart’s shares 5 years ago would now be looking at only $59.42.
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