What Happened:
Shares of cloud monitoring software company Datadog (NASDAQ:DDOG) jumped 5.4% in the morning session after the Commerce Department reported that the personal consumption expenditures price index, a measure of inflation that the Fed monitors closely, rose by 5% in February compared to the same period last year, below expectations. This demonstrates that inflation is softening and may mean to the Fed that there is less urgency to hike rates further.
What is the market telling us:
Datadog's shares are very volatile and over the last year have had 61 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
sDatadog is up 0.58% since the beginning of the year, and at $72.458 per share it is still trading 53.7% below its 52-week high of $156.56 from April 2022. Investors who bought $1,000 worth of Datadog's shares at the IPO in September 2019 would now be looking at an investment worth $1,930.
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