What Happened?

A number of stocks fell in the afternoon session after investor apprehension intensified ahead of a key policy speech and perplexing inflation signals clouded the economic outlook, leading to a wider market retreat from growth-oriented stocks. 

The downturn in the market was largely attributed to a significant sell-off in megacap tech and chipmaker shares. Nvidia, Advanced Micro Devices (AMD), and Broadcom all saw notable drops, dragging down the VanEck Semiconductor ETF. Other major tech-related companies like Tesla, Meta Platforms, and Netflix were also under pressure. A key reason for this trend is that much of the recent market gains have been concentrated in the "AI trade," which includes these large technology and semiconductor companies. So this could also mean that some investors are locking in some gains ahead of more definitive feedback from the Fed.

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:

• Social Networking company Reddit (NYSE: RDDT) fell 6.4%. Is now the time to buy Reddit? Access our full analysis report here, it’s free.
• Consumer Subscription company Roku (NASDAQ: ROKU) fell 3.6%. Is now the time to buy Roku? Access our full analysis report here, it’s free.
• Financial Technology company Remitly (NASDAQ: RELY) fell 4.9%. Is now the time to buy Remitly? Access our full analysis report here, it’s free.
• Financial Technology company Coinbase (NASDAQ: COIN) fell 5.6%. Is now the time to buy Coinbase? Access our full analysis report here, it’s free.
• Consumer Subscription company Udemy (NASDAQ: UDMY) fell 3.4%. Is now the time to buy Udemy? Access our full analysis report here, it’s free.

Zooming In On Reddit (RDDT)

Reddit’s shares are extremely volatile and have had 61 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 6 days ago when the stock gained 5.4% on the news that markets continued to rally as the latest inflation data reinforced expectations for a Federal Reserve rate cut as soon as September. The latest Consumer Price Index (CPI) report for July showed inflation holding steady, reinforcing market expectations that the Federal Reserve could begin cutting interest rates as soon as September. Lower interest rates generally stimulate the economy by making borrowing cheaper for consumers and businesses. This can lead to increased consumer spending and e-commerce activity, which directly benefits online retail and marketplace companies. The positive economic outlook fueled a broad-based rally, pushing the S&P 500 and Nasdaq to new record highs and lifting most growth-oriented technology stocks.

Reddit is up 37.6% since the beginning of the year, and at $228.31 per share, it is trading close to its 52-week high of $246.50 from August 2025. Investors who bought $1,000 worth of Reddit’s shares at the IPO in March 2024 would now be looking at an investment worth $4,526.

Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.