What Happened?
A number of stocks jumped in the morning session after investors scooped up equities, shaking off the initial concerns inferred from the Fed's dot plot, with tech stocks leading the charge.
As a reminder, the Federal Reserve cut its benchmark interest rate by 25 basis points the previous day and signaled that more reductions could come before year-end and beyond. Initially when the cut was announced and Fed Chair Powell held his press conference, there was a pullback in the market as the Fed's "dot plot" revealed that only one cut was likely for 2026. This was below the three cuts that had been priced into the markets.
This was the first interest rate cut of 2025, a move investors had widely anticipated. In response to the decision, stocks rose significantly, positioning major indexes like the S&P 500 and Nasdaq to open at record levels.
The Fed's decision was influenced by signs of a weakening labor market. Lower interest rates are generally seen as positive for stocks because they reduce borrowing costs for businesses and make fixed-income investments like bonds less attractive by comparison, driving capital into the equity market. While Fed Chair Powell noted the path forward has risks, the prospect of looser monetary policy has fueled optimism on Wall Street.
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:
- Online Marketplace company The RealReal (NASDAQ: REAL) jumped 3.3%. Is now the time to buy The RealReal? Access our full analysis report here, it’s free.
- Gig Economy company Upwork (NASDAQ: UPWK) jumped 4.4%. Is now the time to buy Upwork? Access our full analysis report here, it’s free.
- Online Marketplace company Teladoc (NYSE: TDOC) jumped 2.7%. Is now the time to buy Teladoc? Access our full analysis report here, it’s free.
- Online Marketplace company Etsy (NASDAQ: ETSY) jumped 5.2%. Is now the time to buy Etsy? Access our full analysis report here, it’s free.
- Consumer Subscription company Duolingo (NASDAQ: DUOL) jumped 2.9%. Is now the time to buy Duolingo? Access our full analysis report here, it’s free.
Zooming In On Etsy (ETSY)
Etsy’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 10 days ago when the stock gained 7% on the news that the company announced a key leadership change, consolidating its product and technology teams under a single executive. Etsy's Chief Technology Officer, Rafe Colburn, has expanded his responsibilities to become Chief Product and Technology Officer, following the departure of former Chief Product Officer Nick Daniel.
This organizational shift is designed to accelerate the company's use of technology and AI to improve customer experience and marketplace growth. Investors appear to be reacting positively to the move, which signals a reinforced focus on AI-driven innovation to address the pressing issue of buyer demand.
Etsy is up 20.9% since the beginning of the year, and at $64.20 per share, it is trading close to its 52-week high of $70.09 from August 2025. Investors who bought $1,000 worth of Etsy’s shares 5 years ago would now be looking at an investment worth $574.45.
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