What Happened?
A number of stocks fell in the morning session after a hotter-than-expected wholesale inflation report revived concerns about persistent inflation and tempered hopes for a Federal Reserve interest rate cut.
The Producer Price Index (PPI) for July jumped 3.3% from a year earlier, surprising economists who had forecasted a 2.5% rate. This data revived concerns about persistent inflation and forced traders to reconsider the likelihood of a near-term interest rate cut by the Federal Reserve. High-growth technology stocks, which dominate the SaaS landscape, are particularly sensitive to interest rate fluctuations.
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:
- Content Delivery company Cloudflare (NYSE: NET) fell 3.1%. Is now the time to buy Cloudflare? Access our full analysis report here, it’s free.
- Data Storage company Commvault Systems (NASDAQ: CVLT) fell 4.7%. Is now the time to buy Commvault Systems? Access our full analysis report here, it’s free.
- Customer Experience Software company Sprinklr (NYSE: CXM) fell 3.1%. Is now the time to buy Sprinklr? Access our full analysis report here, it’s free.
- Content Delivery company F5 (NASDAQ: FFIV) fell 3.1%. Is now the time to buy F5? Access our full analysis report here, it’s free.
- Sales Software company HubSpot (NYSE: HUBS) fell 3.1%. Is now the time to buy HubSpot? Access our full analysis report here, it’s free.
Zooming In On Commvault Systems (CVLT)
Commvault Systems’s shares are quite volatile and have had 18 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 4.3% on the news that cooler-than-expected inflation data ignited investor optimism for a potential Federal Reserve interest rate cut. The July Consumer Price Index (CPI) report, an important measure of inflation, came in cooler than expected, showing prices holding steady at an annual rate of 2.7%. This data has led to speculation that the Federal Reserve might lower interest rates. For growth-focused sectors like SaaS, lower interest rates are particularly beneficial as they increase the present value of companies' future earnings, making their stocks more appealing.
Commvault Systems is up 20.5% since the beginning of the year, and at $183.35 per share, it is trading close to its 52-week high of $193.37 from July 2025. Investors who bought $1,000 worth of Commvault Systems’s shares 5 years ago would now be looking at an investment worth $4,318.
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