What happened
Shares of Airbnb (ABNB -1.72%) jumped higher today as the broader market made significant gains. The S&P500 increased by 2.6%, and the Nasdaq Compound gained 2.9% towards the end of the trading day as investors regained some optimism in the market following the latest job vacancies data.
That sentiment helped lift shares of Airbnb, which were up 5.2% as of 3:49 p.m. ET.
So what
Most stocks suffered significant losses last month as investors feared that ongoing interest rate hikes by the Federal Reserve could end up spurring a major recession. As a result, the S&P 500 fell 9.6% in September.
Image source: Getty Images.
But investors seemed eager to move on in October and rushed to buy stocks. Some investors may think last month’s selloff created a good buying opportunity for stocks.
Considering there was no company-specific news released by Airbnb today, that optimism is likely what helped push the stock higher in today’s trading. This shift in investor sentiment is in stark contrast to some investors who exited the stock over the past six months, sending its stock price down 36%.
Today’s optimism was likely fueled, in part, by the latest job vacancies data, which showed the number of vacancies in August fell by 1.1 million, or 10%, compared to July.
A mildly slowing job market has some investors hoping the Federal Reserve will ease its aggressive interest rate hikes. Investors fear that the Fed’s interest rate hikes have been too severe and will end up hurting the economy too much.
Now what
As an Airbnb investor myself, I’m happy to see the company’s share price rise today, but I’m not holding my breath that it will stick around for too long.
While I still think Airbnb is a good long-term investment, there’s still a lot of economic uncertainty right now that could cause short-term volatility for the company’s stock.
The Federal Reserve has taken a full steam ahead approach with rising interest rates, and the latest job vacancies data is unlikely to cause them to turn around just yet. That means more rate hikes are likely to come, which could send Airbnb shares plummeting in the near term.
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