What Happened?
A number of stocks jumped in the afternoon session after solid economic data, including a beat on consumer confidence boosted sentiment.
The positive reports fueled a "Turnaround Tuesday" relief rally across the market, with the technology sector among the leaders. The Conference Board's Consumer Confidence Index rose to 91.2 in February, indicating a more optimistic outlook from consumers about income and business conditions. Also, a recent announcement from Anthropic regarding new collaborative tools for its Claude AI agent software helped calm investor nerves. The company's move to expand its AI tools into sectors like human resources and investment banking signals a potential for partnership rather than replacement. This shift in sentiment was reflected in the market, with the iShares Expanded Tech-Software Sector ETF surging 2.4% as investors bought back into beaten-down software stocks.
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 Analytics company Amplitude (NASDAQ:AMPL) jumped 5.2%. Is now the time to buy Amplitude? Access our full analysis report here, it’s free.
- Sales Software company Freshworks (NASDAQ:FRSH) jumped 4.5%. Is now the time to buy Freshworks? Access our full analysis report here, it’s free.
- Automation Software company SoundHound AI (NASDAQ:SOUN) jumped 5.2%. Is now the time to buy SoundHound AI? Access our full analysis report here, it’s free.
- Design Software company Unity (NYSE:U) jumped 5.7%. Is now the time to buy Unity? Access our full analysis report here, it’s free.
- E-commerce Software company GoDaddy (NYSE:GDDY) jumped 5%. Is now the time to buy GoDaddy? Access our full analysis report here, it’s free.
Zooming In On Unity (U)
Unity’s shares are extremely volatile and have had 60 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 12 days ago when the stock dropped 9.8% on the news that investors continued to distinguish between the winners and losers in the artificial intelligence boom, leading to a broad sell-off.
The Nasdaq fell 1.5%, while the S&P 500 and Dow Jones Industrial Average also saw significant declines. This market shift indicated that investors were becoming more selective, moving beyond the initial excitement surrounding AI. In addition, a stronger-than-expected U.S. jobs report dampened investor expectations for near-term interest rate cuts from the Federal Reserve. Data showed the U.S. labor market remained resilient, with non-farm payrolls indicating impressive job creation and falling unemployment. This positive economic signal led markets to re-evaluate the timeline for monetary policy easing, which is the process by which a central bank reduces interest rates to stimulate economic growth. Investors priced in the first potential rate cut for July, a shift from previous expectations of June. This delay created a headwind for growth-oriented sectors like software, as higher interest rates can reduce the present value of future earnings.
Unity is down 59.5% since the beginning of the year, and at $17.93 per share, it is trading 63.7% below its 52-week high of $49.47 from December 2025. Investors who bought $1,000 worth of Unity’s shares 5 years ago would now be looking at an investment worth $162.29.
While Wall Street chases Nvidia at all-time highs, an under-the-radar semiconductor supplier is dominating a critical AI component these giants can’t build without. Click here to access our full research report, it’s free.