What Happened?
A number of stocks fell in the afternoon session after the combination of rising oil prices, higher Treasury yields, and shifting rate expectations tightened the macro backdrop for corporate clients.
ADP's May payroll print (122,000 jobs added, above the 110,000 consensus) confirmed the labor market remains firm, but the data also pushed rate hike expectations higher, reducing the likelihood of the relief companies had been anticipating.
Adding to the weakness, GitLab announced it would cut approximately 14% of its workforce and exit 22 countries, signaling that enterprise clients continue to manage costs tightly even amid a broader market recovery. In a sector where spending depends on corporate confidence, higher-for-longer rates and geopolitical uncertainty are a direct headwind.
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:
- Traditional Media & Publishing company IMAX (NYSE: IMAX) fell 4.1%. Is now the time to buy IMAX? Access our full analysis report here, it’s free.
- Advertising & Marketing Services company Magnite (NASDAQ: MGNI) fell 4.1%. Is now the time to buy Magnite? Access our full analysis report here, it’s free.
- Enterprise Networking company Applied Digital (NASDAQ: APLD) fell 4.7%. Is now the time to buy Applied Digital? Access our full analysis report here, it’s free.
Zooming In On Applied Digital (APLD)
Applied Digital’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 19 days ago when the stock dropped 7.9% on the news that investors reacted to a cocktail of negative macroeconomic news, including surging oil prices and rising Treasury yields.
The 10-year Treasury note yield jumped to 4.56%, a one-year high, fueling concerns about inflation and potential interest rate hikes. Compounding these worries, WTI crude oil prices rose to around $104 per barrel amid geopolitical tensions. The market sentiment was also dampened by a general disappointment that the recent summit between President Trump and Chinese President Xi ended without any major agreements. This combination of factors led to a broad-based sell-off, pulling major indices like the S&P 500 and Nasdaq down from their recent record highs.
Applied Digital is up 63.7% since the beginning of the year, and at $46.02 per share, it is trading close to its 52-week high of $49.65 from May 2026. Investors who bought $1,000 worth of Applied Digital’s shares 5 years ago would now be looking at an investment worth $9,708.
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