What Happened?
Shares of private markets investment firm StepStone Group (NASDAQ: STEP) fell 2% in the afternoon session after the major indices continued to retreat (Nasdaq -1.5%, S&P 500 -1.2%) amid profit-taking and renewed concerns about tariffs.
Instead, the move appears linked to a wider sell-off on Wall Street, which saw major indices like the S&P 500 and Nasdaq Composite fall significantly. Market sentiment soured as the 10-year Treasury yield climbed, making bonds more attractive to investors and putting downward pressure on stock valuations.
Adding to the anxiety was a court ruling that deemed certain tariffs illegal, creating uncertainty even though they remain in place pending appeal. In this risk-off environment, many stocks declined regardless of their individual fundamentals, and StepStone Group was likely caught in the market-wide retreat.
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What Is The Market Telling Us
StepStone Group’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 previous big move we wrote about was 11 days ago when the stock gained 4.9% on the news that the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.
StepStone Group is up 3.5% since the beginning of the year, but at $60.76 per share, it is still trading 12.3% below its 52-week high of $69.32 from November 2024. Investors who bought $1,000 worth of StepStone Group’s shares at the IPO in September 2020 would now be looking at an investment worth $2,431.
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