What Happened?
A number of stocks jumped in the morning session after President Donald Trump signaled a willingness to end the multi-week military conflict with Iran.
This news provided a much-needed boost to markets. The geopolitical tensions had pushed the Nasdaq-100 index into correction territory, defined as a drop of more than 10% from its peak. Concerns over spiking oil prices and broader market uncertainty weighed heavily on investor sentiment, particularly impacting growth-oriented technology stocks. With the possibility of de-escalation in the Middle East, investors showed renewed confidence, leading to a recovery in major tech names. The Technology Select Sector SPDR Fund (XLK) saw gains, reflecting the broader positive shift in the sector.
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:
- Consumer Subscription company Chegg (NYSE: CHGG) jumped 9%. Is now the time to buy Chegg? Access our full analysis report here, it’s free.
- Online Marketplace company Sea (NYSE: SE) jumped 3.5%. Is now the time to buy Sea? Access our full analysis report here, it’s free.
- Online Retail company Wayfair (NYSE: W) jumped 5.1%. Is now the time to buy Wayfair? Access our full analysis report here, it’s free.
- Online Marketplace company Etsy (NYSE: ETSY) jumped 3.7%. Is now the time to buy Etsy? Access our full analysis report here, it’s free.
- Consumer Subscription company Duolingo (NASDAQ: DUOL) jumped 5.2%. Is now the time to buy Duolingo? Access our full analysis report here, it’s free.
Zooming In On Chegg (CHGG)
Chegg’s shares are extremely volatile and have had 93 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 15 days ago when the stock gained 2.7% on the news that the price of oil fell and concerns eased regarding potential supply chain disruptions from the conflict in Iran.
A barrel of benchmark U.S. crude dropped 4% to $94.75, alleviating some economic pressure. This, combined with abating fears over a prolonged closure of the Strait of Hormuz, helped fuel a broad market rally. The S&P 500 jumped 1.2%, putting it on track for its best day in five weeks, while the Dow Jones Industrial Average and the tech-heavy Nasdaq also saw significant gains. The positive sentiment was widespread, with technology, consumer discretionary goods, and real estate companies leading the advance as investors reacted to the improved macroeconomic outlook.
Chegg is down 25.1% since the beginning of the year, and at $0.73 per share, it is trading 60.1% below its 52-week high of $1.84 from September 2025. Investors who bought $1,000 worth of Chegg’s shares 5 years ago would now be looking at only $8.57.
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