What Happened?
Shares of digital advertising platform The Trade Desk (NASDAQ: TTD) jumped 5.1% in the morning session after the stock extended its positive momentum as the company provided an upbeat statement regarding its partnership with Walmart.
This recent development directly addresses a major concern for investors, who were worried after a report suggested Walmart had renegotiated its agreement with TTD to allow for other ad-buying platforms. The company's press release, which quoted a Walmart executive, emphasized that the two companies are "fully committed to their partnership" and plan to expand it. This news helps to counter the narrative that The Trade Desk is losing ground to rivals like Amazon, a key factor in the stock's recent volatility and sell-off following its conservative Q3 guidance. By clarifying its strong relationship with a major partner, TTD has bolstered investor confidence and provided a catalyst for the stock's recovery.
After the initial pop the shares cooled down to $54.70, up 5% from previous close.
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What Is The Market Telling Us
The Trade Desk’s shares are very volatile and have had 24 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 4 days ago when the stock dropped 6.9% on the news that markets pulled back as a hotter-than-expected wholesale inflation report for July dampened hopes for a Federal Reserve interest rate cut. The U.S. Producer Price Index (PPI), a key measure of wholesale inflation, rose 0.9% month-over-month in July, far exceeding the 0.2% increase that economists had predicted. Annually, prices at the wholesale level jumped 3.3%, also surpassing the 2.5% forecast.
This hotter-than-expected data has poured cold water on widespread expectations for an interest rate cut from the Federal Reserve next month. Persistent inflation makes it less likely for the central bank to ease monetary policy. Sectors with high-growth stocks, such as SaaS, are particularly sensitive to interest rate changes, as the prospect of higher rates for longer can diminish the present value of their future earnings, leading to a decline in stock prices.
The Trade Desk is down 53.5% since the beginning of the year, and at $54.70 per share, it is trading 60.8% below its 52-week high of $139.51 from December 2024. Investors who bought $1,000 worth of The Trade Desk’s shares 5 years ago would now be looking at an investment worth $1,166.
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