What Happened?

A number of stocks fell in the afternoon session after escalating geopolitical tensions in the Middle East and climbing global bond yields dampened investor risk appetite. 

Bloomberg reported renewed conflict between the U.S. and Iran in the Strait of Hormuz pushed crude oil prices sharply higher, reviving inflation concerns across global markets. At the same time, Bloomberg also reported global government bond yields reached multiyear highs as investors weighed the growing likelihood of a Federal Reserve interest rate hike in September. 

Rising Treasury yields present significant headwinds for equity markets, particularly for high-valuation growth sectors, as higher borrowing costs can compress corporate profit margins and make fixed-income alternatives more appealing. Coupled with surging energy costs and macroeconomic uncertainty, the shift in interest rate expectations prompted broad-based selling across equity indices.

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:

• Automation Software company Appian (NASDAQ:APPN) fell 7%. Is now the time to buy Appian? Access our full analysis report here, it’s free.
• Data Infrastructure company C3.ai (NYSE:AI) fell 5.4%. Is now the time to buy C3.ai? Access our full analysis report here, it’s free.
• Network Security company Palo Alto Networks (NASDAQ:PANW) fell 5.9%. Is now the time to buy Palo Alto Networks? Access our full analysis report here, it’s free.
• Vulnerability Management company Rapid7 (NASDAQ:RPD) fell 9.7%. Is now the time to buy Rapid7? Access our full analysis report here, it’s free.
• E-commerce Software company Shopify (NASDAQ:SHOP) fell 4.6%. Is now the time to buy Shopify? Access our full analysis report here, it’s free.

Zooming In On Rapid7 (RPD)

Rapid7’s shares are extremely volatile and have had 46 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 5 days ago when the stock gained 15.1% on the news that quarterly earnings and upbeat corporate commentary signaled that artificial intelligence is driving growth across enterprise software rather than threatening legacy business models. Shares across the enterprise software and software-as-a-service (SaaS) space advanced significantly following stronger-than-expected quarterly results from major technology firms. The sector-wide surge eased long-standing investor fears that artificial intelligence could disrupt traditional software platforms. Instead, quarterly reports and executive remarks highlighted that generative AI is acting as a catalyst for software adoption, allowing enterprise platforms to expand product capabilities and drive tangible monetization. This dynamic was vividly illustrated by recent results from Salesforce, CrowdStrike, and Okta. At Salesforce, AI-powered Agentforce and Slack offerings saw rapid growth, with Agentforce annual recurring revenue (ARR) reaching $1.5 billion. Furthermore, Slackbot, the company's AI assistant, became the fastest-adopted AI product in company history, surpassing 1 million active users just five months after launch. In the cybersecurity space, AI is simultaneously creating new threat vectors and driving urgent defense spending. CrowdStrike CEO George Kurtz attributed recent momentum to “the world’s adoption of AI rapidly expanding the attack surface,” which has intensified the need for advanced security solutions and driven increased uptake of AI security modules. Similarly, Okta reported that its new AI-focused identity offerings drove approximately 30% of new bookings during the quarter and increased average contract values by roughly 40% when included in deals. The broader rally, highlighted by a 20% surge in Salesforce, underscores growing market confidence that established enterprise software vendors are well-positioned to capture massive economic value from the ongoing deployment of AI technologies.

Rapid7 is down 14.8% since the beginning of the year, and at $12.16 per share, it is trading 41.6% below its 52-week high of $20.81 from September 2025. Investors who bought $1,000 worth of Rapid7’s shares 5 years ago would now be looking at only $99.85.

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