Why Cloud Stocks Snowflake and MongoDB Were Beating the Market Today

Shares of some cloud stocks, like Snowflake (NYSE: SNOW) and MongoDB (NASDAQ: MDB), were shaking off general stock market angst today and showing respectable gains. Snowflake was up 3.3% and MongoDB was up 2.3%, compared to a 0.3% drop for the Nasdaq Composite, as of 12:40 p.m. ET on Wednesday.

There were other high-growth stocks like these two that were also up on a down day after the U.S. Bureau of Labor Statistics reported a 9.1% year-over-year increase in the Consumer Price Index (CPI). Energy and food costs were the leading causes of inflation, and are starting to take their toll on households and businesses alike. What gives?

A couple of reasons might be leading to growth stocks notching a positive return. The first has to do with the Federal Reserve, which has already been hiking interest rates to try to combat inflation. With the CPI still at levels not seen since the early 1980s, some investors are betting the Fed will do another aggressive rate hike when it meets in late July. Many market participants have wanted the Fed to hike rates much higher at a faster pace to get the pain over with, so the market can begin to heal.

Source Fool.com