Introduction to the Market
The stock market experienced a surge in the afternoon session after the release of key inflation data that aligned with market expectations. This sparked optimism among investors, who are now hoping for potential interest rate cuts. The August Personal Consumption Expenditures (PCE) price index, which is the Federal Reserve’s preferred inflation gauge, came in as forecast, easing concerns about the central bank needing to maintain high interest rates for longer.
Impact on the Market
As a result of the positive inflation data, investor hopes for future rate cuts have been bolstered. Lower interest rates are typically beneficial for growth sectors like technology because they increase the valuation of future earnings. This positive sentiment was widespread, contributing to gains across major indexes, including the Dow Jones Industrial Average, S&P 500, and the tech-heavy Nasdaq. The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Affected Stocks
Among the stocks that were impacted by the news is Zscaler (ZS). Zscaler’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. In that context, the recent move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
Zscaler’s Performance
The previous big move in Zscaler’s stock was 8 days ago when it gained 4.1% on the news that investors scooped up equities, shaking off the initial concerns inferred from the Fed’s dot plot, with tech stocks leading the charge. As a reminder, the Federal Reserve cut its benchmark interest rate by 25 basis points and signaled that more reductions could come before year-end and beyond. Zscaler is up 62.7% since the beginning of the year, and at $295.56 per share, it is trading close to its 52-week high of $316.50 from July 2025. Investors who bought $1,000 worth of Zscaler’s shares 5 years ago would now be looking at an investment worth $2,135.
Staying Informed
For investors who want to stay informed about the stocks they care about, adding them to a watchlist can provide timely explanations for significant moves. This service is free and can help investors make informed decisions about their investments.
Conclusion
In conclusion, the release of positive inflation data has sparked optimism among investors, who are now hoping for potential interest rate cuts. This has led to gains across major indexes, including the Dow Jones Industrial Average, S&P 500, and the tech-heavy Nasdaq. Stocks like Zscaler have been impacted by the news, and investors who want to stay informed about their investments can add them to a watchlist to receive timely explanations for significant moves. By staying informed and making informed decisions, investors can navigate the stock market and make the most of their investments.
