What Happened?
A number of stocks fell in the afternoon session after President Trump declared the Iran ceasefire "over" and threatened renewed strikes, sending oil higher and bond yields up in a session that punished high-multiple tech.
Software companies are quintessential long-duration growth stocks, valued on cash flows expected far into the future, which makes them acutely sensitive to interest rates.
When a crude spike revives inflation fears and pushes government bond yields higher, as it did, the discount rate applied to those distant earnings rises and rich software valuations compress fastest. The move was amplified by a risk-off rotation: with geopolitical tensions flaring, investors rotate out of the market's most expensive, momentum-driven corner and into energy and defensives. Though software has little direct exposure to oil as an input, its valuation math and its role as a funding source when investors de-risk make it a casualty of these shocks.
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:
- Lending Software company Upstart (NASDAQ: UPST) fell 5.1%. Is now the time to buy Upstart? Access our full analysis report here, it’s free.
- Banking Software company nCino (NASDAQ: NCNO) fell 5.6%. Is now the time to buy nCino? Access our full analysis report here, it’s free.
- E-commerce Software company Wix (NASDAQ: WIX) fell 5.6%. Is now the time to buy Wix? Access our full analysis report here, it’s free.
Zooming In On Wix (WIX)
Wix’s shares are extremely volatile and have had 35 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 2.2% after its competitor in the website-building sector, Elementor, announced it is laying off 100 employees, representing 30% of its workforce.
The move by the rival company raised investor concerns about the overall health of the website development industry. Such significant cuts at a competitor can signal broader market challenges, leading to negative sentiment for other companies in the same space, including Wix.
Wix is down 52.7% since the beginning of the year, and at $47.75 per share, it is trading 74.1% below its 52-week high of $184.24 from September 2025. Investors who bought $1,000 worth of Wix’s shares 5 years ago would now be looking at only $163.58.
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