What Happened?
A number of stocks jumped in the afternoon session after the United States and Iran agreed to halt their tit-for-tat military exchanges, easing fears of a wider Middle East conflict that had rattled markets over the weekend. The relief lifted the whole risk complex.
The pre-existing trigger was the chip-to-software rotation, sparked by a June 25 report that OpenAI may delay its IPO, which softened the "SaaSpocalypse" fear that AI labs would quickly cannibalize incumbent SaaS. The Iran news matters for software through the rate channel. Lower oil eases the inflation impulse that had pushed traders to price in a Fed rate hike later in the year, and falling rate-hike odds disproportionately help long-duration, high-multiple growth software exactly the cohort hit hardest in 2026. So, the de-escalation removed a macro overhang, at the same moment the micro narrative (OpenAI's constraints) reduced the existential AI-disruption fear.
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:
- Data Storage company MongoDB (NASDAQ: MDB) jumped 5.9%. Is now the time to buy MongoDB? Access our full analysis report here, it’s free.
- Communications Platform company Bandwidth (NASDAQ: BAND) jumped 5.6%. Is now the time to buy Bandwidth? Access our full analysis report here, it’s free.
- Endpoint Security company SentinelOne (NYSE: S) jumped 6.6%. Is now the time to buy SentinelOne? Access our full analysis report here, it’s free.
Zooming In On SentinelOne (S)
SentinelOne’s shares are very volatile and have had 20 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 14 days ago when the stock gained 3.4% on the news that yields fell as the Trump administration announced a new peace deal that would lead to the reopening of the Strait of Hormuz.
Software companies are among the most sensitive to long-term interest rates because their valuations depend on earnings projected years ahead. The discount rate applied to those forward cash flows is derived from the risk-free rate, in practice, the 10-year Treasury yield.
When that yield drops to 4.41%, its lowest since mid-May, valuations across the sector improve without a single new contract being signed. Beyond the rate mechanics, the macro improvement matters for enterprise software specifically: customers who had deferred purchasing and renewal decisions during the period of geopolitical uncertainty now face a more settled planning environment.
SentinelOne is up 15.5% since the beginning of the year, but at $16.91 per share, it is still trading 14.5% below its 52-week high of $19.78 from July 2025. Despite the year-to-date gain, investors who bought $1,000 worth of SentinelOne’s shares 5 years ago would now be looking at only $397.93.
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