What Happened?
Shares of content discovery platform Taboola (NASDAQ: TBLA) fell 1.5% in the afternoon session after the company's stock was caught in a broader market downturn that particularly affected the technology sector.
Investors also reacted to a federal court ruling that most of President Trump's global tariffs were illegal, raising uncertainty over trade policy and the fiscal impact of potential refunds. Rising Treasury yields added to the pressure, with the 10-year climbing above 4.2% and the 30-year nearing 5%, intensifying worries about stretched equity valuations. September's historically weak track record for stocks further dampened sentiment, leaving traders cautious ahead of the jobs report later in the week and the Federal Reserve's upcoming rate decision.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Taboola? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Taboola’s shares are quite volatile and have had 17 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 21 days ago when the stock gained 3.2% on the news that a key inflation report met expectations, bolstering hopes for a Federal Reserve interest rate cut, while a separate report indicated rising optimism among small businesses. The July Consumer Price Index (CPI) report showed annual inflation holding steady at 2.7%, aligning with forecasts and increasing the probability of a Federal Reserve interest rate cut to over 94%. Lower interest rates can stimulate the economy by making it cheaper for businesses to borrow and invest.
Further boosting confidence, the National Federation of Independent Business (NFIB) Small Business Optimism Index rose to a five-month high. This is a crucial indicator for the Business Services sector, as many of its companies cater to small and medium-sized enterprises. The combined positive data fueled a broad, "risk-on" sentiment, where investors favor economically sensitive sectors, leading to gains across IT services, staffing, and manufacturing.
Taboola is down 11.8% since the beginning of the year, and at $3.29 per share, it is trading 22.8% below its 52-week high of $4.26 from December 2024. Investors who bought $1,000 worth of Taboola’s shares at the IPO in October 2020 would now be looking at an investment worth $329.00.
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