What Happened?
A number of stocks jumped in the afternoon session after the United States and Iran agreed to halt their tit-for-tat military exchanges, easing fears of a wider Middle East conflict that had rattled markets over the weekend.
The relief lifted the whole risk complex. The pre-existing trigger was the chip-to-software rotation, sparked by a June 25 report that OpenAI may delay its IPO, which softened the "SaaSpocalypse" fear that AI labs would quickly cannibalize incumbent SaaS. The Iran news matters for software through the rate channel. Lower oil eases the inflation impulse that had pushed traders to price in a Fed rate hike later in the year, and falling rate-hike odds disproportionately help long-duration, high-multiple growth software exactly the cohort hit hardest in 2026. So, the de-escalation removed a macro overhang, at the same moment the micro narrative (OpenAI's constraints) reduced the existential AI-disruption fear.
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:
- Cloud Monitoring company PagerDuty (NYSE: PD) jumped 3.8%. Is now the time to buy PagerDuty? Access our full analysis report here, it’s free.
- Data Analytics company Samsara (NYSE: IOT) jumped 3.8%. Is now the time to buy Samsara? Access our full analysis report here, it’s free.
Zooming In On PagerDuty (PD)
PagerDuty’s shares are very volatile and have had 28 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 5 days ago when the stock gained 3.7% on the news that the 10-year Treasury yield dropped below 4.5%, providing valuation relief amid a broader tech pullback.
While semiconductor stocks like Micron (-2%) and Cerebras (-10%) dragged the Nasdaq lower, software names like Salesforce and ServiceNow found relative support from falling yields. The 10-year Treasury yield fell below 4.5% as oil prices slid, signaling easing inflation pressures. Software companies, particularly high-growth SaaS names, are highly sensitive to interest rates because their valuations are based on cash flows expected far in the future.
When the 10-year yield drops, the discount rate applied to those future earnings decreases, mechanically boosting their present value. While the broader tech sector is undergoing a "recalibration of expectations" following the semiconductor run-up, falling yields validate the structural valuation floor for software stocks with recurring revenue models.
PagerDuty is down 24.2% since the beginning of the year, and at $9.39 per share, it is trading 45.3% below its 52-week high of $17.17 from September 2025. Investors who bought $1,000 worth of PagerDuty’s shares 5 years ago would now be looking at only $210.53.
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