What Happened?
A number of stocks fell in the afternoon session after the Federal Reserve held its benchmark rate at 3.5%–3.75%, unchanged since the central bank cut by three-quarters of a point in late 2025, and then delivered a dot plot that told investors the easing cycle underpinning the sector's re-rating might be over.
The median year-end rate estimate moved from 3.4% to 3.8%, removing any remaining expectation of a 2026 cut and introducing the possibility of a hike. Software companies are priced on earnings five to ten years into the future, and every basis point increase in the risk-free rate reduces the present value of those cash flows. The 2-year Treasury yield rose 11 basis points to 4.161% in the session. The late-2025 cuts had given software valuations room to expand; the FOMC outcome constricted that room.
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:
- Video Conferencing company RingCentral (NYSE: RNG) fell 5.1%. Is now the time to buy RingCentral? Access our full analysis report here, it’s free.
- Data Analytics company CLEAR Secure (NYSE: YOU) fell 3.4%. Is now the time to buy CLEAR Secure? Access our full analysis report here, it’s free.
Zooming In On RingCentral (RNG)
RingCentral’s shares are extremely volatile and have had 36 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 8 days ago when the stock dropped 4% on the news that Anthropic released new models (Claude Fable 5 and Claude Mythos 5) which were described as built for "the hardest knowledge work and coding problems."
Mythos had been restricted for roughly two months under Project Glasswing, a managed rollout to select governments and enterprises designed to contain its cybersecurity risk profile before a wider release.
That matters because the SaaSpocalypse thesis gets reinforced every time a more capable AI agent arrives. When Anthropic launched Claude Cowork in January, it triggered a $285 billion rout in software stocks in a single session, with Goldman's US software basket falling. This is another iteration of the same logic: if an agent available for $20 a month can now complete long-run, multi-step knowledge work, the case for more expensive per-seat enterprise subscriptions gets harder to defend with each new model generation.
Adding to the weakness, US Central Command confirmed an American Apache helicopter had gone down near the coast of Oman, and Trump said the US "must respond" to what he described as an Iranian attack over the Strait of Hormuz.
The Apache helicopter incident gave the software sector a macro headwind on top of those pressures. Software is a long-duration asset, its valuation is rooted in future cash flows, making it particularly exposed to any development that firms up the case for sustained higher interest rates. An Iranian attack on US military assets over the Strait of Hormuz is precisely that kind of development.
RingCentral is up 32.5% since the beginning of the year, but at $36.57 per share, it is still trading 25.5% below its 52-week high of $49.10 from May 2026. Despite the year-to-date gain, investors who bought $1,000 worth of RingCentral’s shares 5 years ago would now be looking at only $128.24.
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