Why did Upstart stock soar today?
Aug. 10, 2022 4:31 PM ET Upstart Holdings, Inc. (UPST) LSPD, SQ, RKT, TREEBy: Max Gottlich, SA News Editor 11 Comments
 cofotoisme
Upstart (NASDAQ: UPST) shares surged 17.6% on Wednesday as stock-market speculators appeared greatly cheered by July's softer-than-expected inflation data, which fueled traders to recede their Fed rate-hike wagers.
The bullish upswing in Upstart ( UPST) stock, though, comes a day after the artificial intelligence-powered consumer lending platform withdrew its full-year guidance, as "the macro uncertainty and the impact of economic stress on consumer delinquencies have led to a decrease in available funding for loans on our platform, which has become the operating constraint of the business," Sanjay Datta, the Upstart's CFO, said during the company's Q2 earnings call.
Upstart ( UPST) also caught a bid intraday as markets priced in a greater chance of less aggressive interest-rate increases at the Federal Reserve's upcoming gathering on September 21. That's a bullish catalyst for companies because their borrowing and funding costs would see some relief from current levels, especially if the central bank were to fully pivot from monetary tightening depending on whether inflation cools down more.
Fintechs, which generally fare well in a stimulative, lower-rate environment (lower loan losses), experienced a broad rally with some of the biggest percentage gainers including Lightspeed Commerce ( LSPD) +10.2%, Block ( SQ) +9.5%, Rocket Companies ( RKT) +7.8% and LendingTree ( TREE) +7%. |
