What Happened?

A number of stocks fell in the afternoon session after reports revealed the Trump administration is considering new restrictions on software exports to China. 

The news amplified investor anxiety surrounding US-China trade relations, triggering a broad sell-off in the technology sector. According to reports, the administration is weighing these limitations as a potential response to China's own trade measures. The uncertainty rattled the market, contributing to declines in major indexes like the S&P 500 and Nasdaq. Proposed export controls of this nature could significantly disrupt the global technology trade, impacting companies that rely on the Chinese market. The move adds to existing macro challenges, creating a cautious outlook among investors for the software industry.

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:

• Project Management Software company Asana (NYSE: ASAN) fell 3%. Is now the time to buy Asana? Access our full analysis report here, it’s free for active Edge members.
• Finance and Accounting Software company BILL (NYSE: BILL) fell 3.1%. Is now the time to buy BILL? Access our full analysis report here, it’s free for active Edge members.
• Endpoint Security company SentinelOne (NYSE: S) fell 2.5%. Is now the time to buy SentinelOne? Access our full analysis report here, it’s free for active Edge members.
• Developer Operations company GitLab (NASDAQ: GTLB) fell 2.6%. Is now the time to buy GitLab? Access our full analysis report here, it’s free for active Edge members.
• Design Software company Procore Technologies (NYSE: PCOR) fell 2%. Is now the time to buy Procore Technologies? Access our full analysis report here, it’s free for active Edge members.

Zooming In On BILL (BILL)

BILL’s shares are very volatile and have had 26 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 2.5% on the news that positive news on corporate earnings, easing political and trade tensions, and optimism about future interest rate cuts all converged to lift investor sentiment. 

The overall market, including the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite, climbed significantly. A major catalyst was Apple shares rising 4% after a firm upgraded its rating, citing improving iPhone demand and predicting a long growth cycle. More broadly, the third-quarter earnings season got off to a strong start, with 76% of the 58 S&P 500 companies beating expectations, lifting the market's mood. 

Additionally, there were hope for an end to the ongoing U.S. government shutdown, which is seen as good for the economy. Investors also moved past recent fears over credit risks that had caused a sell-off the previous week, with shares of regional banks rebounding. Finally, signs that trade tensions with China were de-escalating, including expectations that new tariffs might be avoided, added to the overall positive momentum, leading traders to focus on more favorable factors like earnings and potential Federal Reserve rate cuts.

BILL is down 39% since the beginning of the year, and at $51.25 per share, it is trading 47.4% below its 52-week high of $97.41 from December 2024. Investors who bought $1,000 worth of BILL’s shares 5 years ago would now be looking at an investment worth $466.68.

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