What Happened?
A number of stocks jumped in the afternoon session after the Nasdaq rebounded, up 1.8%, as Trump's Iran peace deal announcement released the rate pressure that weighed on the sector.
Oil prices fell more than 3% following the cancellation of planned strikes on Iran, easing the inflation pressure that had been driving rate hike expectations. The 10-year Treasury yield fell to 4.47% from 4.55%, a move that expands the forward earnings multiples tech stocks trade on. Every basis point of yield reduction matters more to a company priced on earnings years into the future than to almost any other sector.
The combination of lower oil, lower yields, and geopolitical risk being removed from global supply chains was precisely the backdrop tech needed to recover after three consecutive sessions of selling.
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:
- Endpoint Security company CrowdStrike (NASDAQ: CRWD) jumped 6.5%. Is now the time to buy CrowdStrike? Access our full analysis report here, it’s free.
- Content Delivery company Cloudflare (NYSE: NET) jumped 3.6%. Is now the time to buy Cloudflare? Access our full analysis report here, it’s free.
Zooming In On CrowdStrike (CRWD)
CrowdStrike’s shares are quite volatile and have had 17 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 6 days ago when the stock dropped 4.2% as a stronger-than-expected jobs report signaled that the Federal Reserve may keep interest rates higher for longer.
The U.S. economy added 172,000 nonfarm payroll jobs in May, significantly surpassing economists' expectations of around 85,000, while the unemployment rate held steady at 4.3%. This robust labor market data eases concerns of an economic slowdown but diminishes the likelihood of near-term interest rate cuts by the Federal Reserve.
A prolonged high-interest-rate environment can create headwinds for growth-oriented sectors like technology, as it pressures stock valuations by making future earnings less valuable in the present. As a result, investors recalibrated their expectations for a 'higher-for-longer' rate scenario.
CrowdStrike is up 53.1% since the beginning of the year, but at $694.26 per share, it is still trading 11.2% below its 52-week high of $782.17 from May 2026. Investors who bought $1,000 worth of CrowdStrike’s shares 5 years ago would now be looking at an investment worth $3,002.
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