What Happened?

A number of stocks jumped in the afternoon session after the Bureau of Labor Statistics reported that the July Producer Price Index was completely flat month-over-month—coming in below expectations for a 0.2% increase—following the Consumer Price Index print (released earlier in the week) which showed a mild 0.1% monthly increase and an annual inflation rate cooling to 3.4%. Together, the data points suggest price pressures are moderating across both wholesale and consumer levels, taking the urgency out of the Federal Reserve's "higher for longer" rate stance.

For the software and data analytics sector, macroeconomic data often overrides individual company fundamentals on days without earnings. Software companies are generally valued on cash flows expected many years in the future, making them long-duration assets that are highly sensitive to the discount rate used to value those future dollars. When inflation cools, bond yields typically fall as markets price in a less aggressive Federal Reserve. A lower risk-free rate mathematically boosts the present value of future software earnings, triggering an automatic multiple expansion across the sector.

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:

• Vulnerability Management company Rapid7 (NASDAQ: RPD) jumped 3.6%. Is now the time to buy Rapid7? Access our full analysis report here, it’s free.
• Video Conferencing company 8x8 (NASDAQ: EGHT) jumped 0.2%. Is now the time to buy 8x8? Access our full analysis report here, it’s free.
• Healthcare And Life Sciences Software company Doximity (NYSE: DOCS) jumped 0.3%. Is now the time to buy Doximity? Access our full analysis report here, it’s free.
• Payments Software company Marqeta (NASDAQ: MQ) jumped 1.1%. Is now the time to buy Marqeta? Access our full analysis report here, it’s free.
• Vulnerability Management company Tenable (NASDAQ: TENB) jumped 3.2%. Is now the time to buy Tenable? Access our full analysis report here, it’s free.

Zooming In On Rapid7 (RPD)

Rapid7’s shares are extremely volatile and have had 43 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 2 days ago when the stock gained 26.9% on the news that the company reported second-quarter 2026 results that featured a significant earnings beat and raised full-year profit guidance, successfully offsetting concerns over a broader corporate restructuring and slowing top-line growth. Rapid7's adjusted earnings per share of $0.44 crushed analysts' expectations of $0.35. Adjusted EBITDA of $35.85 million also beat the $31.93 million consensus, generating a robust 17% margin. While revenue of $210.9 million edged past estimates, it represented a 1.5% year-over-year decline. Encouraged by the strong profitability and a steady 15.1% free cash flow margin, management confidently raised its full-year adjusted EPS guidance by 15.7% to $1.81 at the midpoint.

Despite the bottom-line strength, underlying growth metrics revealed a company in transition. Annual Recurring Revenue (ARR) slipped 2% year-over-year to $824 million, billings dropped 5.7% to $202.4 million, and Q3 revenue guidance came in slightly soft. To correct course, newly appointed CEO Wael Mohamed announced a 12% workforce reduction, pivoting Rapid7's resources to focus deeply on its core Detection and Response platforms. Investors cheered the aggressive profitability push and the company's emerging AI tailwinds.

Rapid7 highlighted its recent integration of OpenAI's GPT-5.5 into its security workflows and its inclusion in Anthropic's exclusive "Project Glasswing"—leveraging the powerful Claude Mythos model for automated vulnerability patching. By decisively aligning its operating model with cutting-edge AI defenses, Rapid7 convinced the market that its leaner, more focused structure will pay off.

Rapid7 is down 10.9% since the beginning of the year, and at $12.71 per share, it is trading 40.8% below its 52-week high of $21.46 from August 2025. Investors who bought $1,000 worth of Rapid7’s shares 5 years ago would now be looking at only $112.07.

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