What happened

Shares of Fastly (FSLY) tumbled by as much as 7.5% this morning as some investors continued a tech stock sell-off that began last week. Investors, particularly in the tech sector, have been selling their shares lately and taking the profits. But by midafternoon, Fastly's stock had reversed course. As of 3:36 p.m. EDT on Tuesday, Fastly's stock was up less than 1%.

So what

What would cause Fastly's stock to drop so far during morning trading, only to gain back its losses by the afternoon? The volatility likely comes as some technology investors are trying to figure out whether the run-up of tech stocks over the past few months is over, or if they should add to their positions. 

Red and green line graphs on a dark background.

Image source: Getty Images.

Late last week, the broader market began sliding, mostly driven by investors selling their tech stocks and taking the profits they've made over the past few months. Technology companies have been one the brightest spots in the stock market since March, helped by stay-at-home orders and social distancing. Fastly, for its part, helps companies speed up their websites and apps, and many investors have looked to the company as a crucial tool for a socially distanced world. 

Despite today's volatility, and a few days of share price drops last week, Fastly's stock is still up 306% this year.

Now what 

The broader market has been tumbling over the past few trading days, driving down the S&P 500 6% since Sept. 2. So even though Fastly's stock rebounded from a steep drop today, investors could still experience a bumpy ride ahead. The important thing for them to remember is that the current volatility doesn't have anything to do with Fastly's business or its long-term prospects. The broader market is experiencing swings as investors try to figure out how to respond to the coronavirus pandemic and the U.S. recession.