What Happened?
Shares of digital advertising platform The Trade Desk (NASDAQ:TTD) jumped 3.2% in the morning session after Federal Reserve Chair Jerome Powell indicated potential interest rate cuts could be coming. The broader market, particularly the tech sector, surged after Federal Reserve Chair Jerome Powell indicated that interest rate cuts could be on the horizon. The tech-heavy Nasdaq Composite jumped 1.9% on the news, lifting growth-sensitive stocks like The Trade Desk.
After the initial pop the shares cooled down to $53.30, up 1.9% from previous close.
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What Is The Market Telling Us
The Trade Desk’s shares are very volatile and have had 25 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 3 days ago when the stock dropped 4.8% on the news that investors took some profits off the table as markets awaited signals on future monetary policy from the Federal Reserve's Jackson Hole symposium later in the week. The downturn in the market was largely attributed to a significant sell-off in megacap tech and chipmaker shares. Nvidia, Advanced Micro Devices (AMD), and Broadcom all saw notable drops, dragging down the VanEck Semiconductor ETF. Other major tech-related companies like Tesla, Meta Platforms, and Netflix were also under pressure. A key reason for this trend is that much of the recent market gains have been concentrated in the "AI trade," which includes these large technology and semiconductor companies. So this could also mean that some investors are locking in some gains ahead of more definitive feedback from the Fed.
The Trade Desk is down 54.7% since the beginning of the year, and at $53.30 per share, it is trading 61.8% below its 52-week high of $139.51 from December 2024. Investors who bought $1,000 worth of The Trade Desk’s shares 5 years ago would now be looking at an investment worth $1,142.
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