What happened?
A number of stocks fell in the afternoon session after hotter-than-expected October consumer inflation and hawkish Federal Reserve commentary reignited interest rate worries.
The pullback followed the October consumer price index report released by the Bureau of Labor Statistics, where headline inflation rose 0.4% month over month, exceeding the 0.3% increase projected by economists polled by Dow Jones, as reported by CNBC. Further pressuring sentiment, Federal Reserve Governor Christopher Waller stated in a speech carried by CNBC that a December rate hike is likely, adding that policymakers should consider a 50-basis-point increase if price pressures persist to protect central bank credibility. This interrupted a strong rebound from the previous session, when the S&P 500 rose 2.4% and the Nasdaq Composite climbed 2.7%, according to CNBC. The pullback was more pronounced in growth-oriented technology stocks as higher rate projections disproportionately affect long-duration cash flows.
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:
- Developer operations company GitLab (NASDAQ: GTLB) fell 3.7%. Is now the time to buy GitLab? Access our full analysis report here, it’s free.
- Design software company Unity (NYSE: U) fell 4.5%. Is now the time to buy Unity? Access our full analysis report here, it’s free.
Zooming in on Unity (U)
Unity’s shares are extremely volatile and have had 48 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 4 days ago when the stock gained 4.2% on the news that the company reported third-quarter 2026 financial results showing 32% revenue growth and its first profitable quarter under GAAP since its initial public offering.
According to a company press release, Unity reported revenue of $622.09 million vs S&P analysts’ estimates of $567.3 million (32.2% year-on-year growth, 9.7% beat). The company projected fourth-quarter strategic revenue to range between $683 million and $691 million. During the earnings call, CEO Matt Bromberg highlighted that advancements in AI-driven modeling and new product releases, such as the Day 28 Optimizer, have fueled both user acquisition and higher returns for customers.
Unity is up 11.4% since the beginning of the year, and at $49.28 per share, it is trading close to its 52-week high of $51.49 from November 2026. Despite the year-to-date gain, investors who bought $1,000 worth of Unity’s shares 5 years ago would now be looking at only $279.29.
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