What Happened?

A number of stocks fell in the afternoon session after new trade tensions and disappointing earnings from major tech companies weighed heavily on investor sentiment. 

A key driver was the news that the White House is considering new restrictions on Chinese exports that use U.S. software, a move that could significantly impact technology companies. This uncertainty over escalating trade tensions created a broad sense of worry in the market. Simultaneously, shares of the semiconductor giant Texas Instruments dropped 6% after its latest earnings and future revenue forecast both came in weaker than expected, which is a big concern for the health of the tech industry. This poor performance from Texas Instruments immediately dragged down the entire semiconductor sector, causing other major chipmakers like Advanced Micro Devices and Micron Technology to also see significant declines. 

Compounding the bad news, streaming service Netflix saw its stock slump 9% after it missed its earnings targets, partly blaming a tax dispute in Brazil. The combined effect of renewed trade war fears and the direct evidence of underperformance from influential companies in the technology sector was enough to push the major market indexes lower.

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:

• Design Software company Unity (NYSE: U) fell 3.8%. Is now the time to buy Unity? Access our full analysis report here, it’s free for active Edge members.
• Data Analytics company Palantir Technologies (NASDAQ: PLTR) fell 5.2%. Is now the time to buy Palantir Technologies? Access our full analysis report here, it’s free for active Edge members.
• Marketing Software company Upland Software (NASDAQ: UPLD) fell 5.4%. Is now the time to buy Upland Software? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Upland Software (UPLD)

Upland Software’s shares are extremely volatile and have had 63 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 9 days ago when the stock gained 3% as President Donald Trump eased concerns over escalating trade tensions with China, calming markets rattled by his earlier tariff threats. U.S. stocks rose sharply, with Nasdaq-100 futures jumping nearly 2%, following a post on Truth Social where Trump suggested the trade conflict would not worsen. This shift in tone provided significant relief to investors, who had driven a sharp sell-off the previous Friday due to fears of higher tariffs. Technology companies with significant international supply chains and sales, such as AMD and Nvidia, led the market rally, with their shares climbing 4.2% and 3.4%, respectively. The broader market indexes, including the S&P 500 and the Dow Jones Industrial Average, also saw substantial gains, reflecting widespread optimism that a potentially damaging trade war might be averted.

Upland Software is down 52.9% since the beginning of the year, and at $2.11 per share, it is trading 60.2% below its 52-week high of $5.31 from December 2024. Investors who bought $1,000 worth of Upland Software’s shares 5 years ago would now be looking at an investment worth $48.44.

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