What Happened?

A number of stocks fell in the afternoon session after President Trump threatened to increase import taxes on Chinese goods, reigniting trade war fears. 

The threat was in response to China's move to restrict its exports of rare earth minerals, which are critical to high-tech manufacturing in the U.S. The unexpected announcement shattered a monthslong calm on Wall Street, sending major indices tumbling. The S&P 500 dropped around 1.3%, while the tech-heavy Nasdaq Composite fell 2.7%. Investors reacted by selling off stocks, particularly in the technology and retail sectors, amid concerns that escalating trade tensions could disrupt global supply chains and increase costs for companies.

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:

• Endpoint Security company SentinelOne (NYSE: S) fell 3.9%. Is now the time to buy SentinelOne? Access our full analysis report here, it’s free for active Edge members.
• Project Management Software company monday.com (NASDAQ: MNDY) fell 2.7%. Is now the time to buy monday.com? Access our full analysis report here, it’s free for active Edge members.
• Vertical Software company Manhattan Associates (NASDAQ: MANH) fell 2.9%. Is now the time to buy Manhattan Associates? Access our full analysis report here, it’s free for active Edge members.
• Automation Software company Pegasystems (NASDAQ: PEGA) fell 3.9%. Is now the time to buy Pegasystems? Access our full analysis report here, it’s free for active Edge members.
• Data Analytics company Strategy (NASDAQ: MSTR) fell 3.4%. Is now the time to buy Strategy? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Pegasystems (PEGA)

Pegasystems’s shares are somewhat volatile and have had 14 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 biggest move we wrote about over the last year was 6 months ago when the stock gained 32.6% on the news that the company reported strong first-quarter 2025 results that significantly exceeded analysts' expectations on both revenue and EPS. Total revenue growth was underpinned by a 23% increase in Pega Cloud annual contract value and a 21% jump in backlog, both suggesting sustained momentum in client demand and deeper customer commitments. Zooming out, we think this was a solid quarter.

Pegasystems is up 15.9% since the beginning of the year, but at $53.88 per share, it is still trading 10.8% below its 52-week high of $60.39 from July 2025. Investors who bought $1,000 worth of Pegasystems’s shares 5 years ago would now be looking at an investment worth $811.81.

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