Why Is Upstart (UPST) Stock Shooting Up Today?
What's the Buzz?
The value of Upstart, an AI-powered lending platform listed on NASDAQ as UPST, surged by 8.1% during the afternoon trading hours following a revival in stock prices at the start of the session amidst ongoing market instability. The stocks gained slightly further after the Federal Open Market Committee upheld rates within the 4.25% to 4.50% range during its meeting in March 2025, chaired by Jerome Powell. The committee also hinted at the likelihood of two more rate cuts within the year, citing a rise in economic uncertainties.
While keeping rates unchanged and signaling potential rate cuts signify predictability (which the market appreciates), the committee revised its growth forecast downwards to 1.7% from the previous 2.1% in December. Simultaneously, the outlook on inflation was revised upward to a 2.8% annual increment for core prices, up from the initial 2.5%. This shift hints at the Federal Reserve's observation of a possible scenario of stagflation, marked by an increase in inflation amid slowing economic growth.
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What Can We Infer from the Market Scenario?
With Upstart's stock exhibiting high volatility, comprising 70 moves of over 5% in the past year, today's surge suggests that the market views the news as significant yet not a game-changer in altering its perception of the firm.
A significant previous move occurred 7 days back when the stock spiked by 7.5% following positive data from the Bureau of Labor Statistics indicating lower-than-expected inflation figures for February 2025. The Consumer Price Index (CPI) rose by 0.2% from the previous month (compared to anticipated 0.3% increment), while year-on-year headline inflation saw a 2.8% rise (versus the expected 2.9%). Although the inflation figures approached the Fed's target of 2%, they had not quite reached it. The market's response was fairly positive, with the Nasdaq leading the way with a 1.4% climb, particularly boosting certain tech stocks.
Since the onset of the year, Upstart has encountered a 17.1% decline, with its current price per share at $50.21, trading 43.4% lower than its peak of $88.77 from February 2025. Investors who initially invested $1,000 in Upstart's shares during the IPO in December 2020 would currently see their investment valued at $1,710.
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