Why Cadence Design Systems Stock Fell Over 18% in January
Shares of Cadence Design Systems (NASDAQ: CDNS) fell 18.4% last month, according to data provided by S&P Global Market Intelligence. Many growth stocks started to experience some turbulence around Thanksgiving, but not Cadence -- at least not until January when the Federal Reserve hinted it was ready to start raising its benchmark interest rate this year in an effort to fight inflation.
Higher interest rates lower the present value of stocks, especially of growth companies. Thus, Cadence, which has been on an absolute tear since the start of 2020 (up 120% even after the sell-off), was due for a cool down.
Image source: Getty Images.
Source Fool.com
