What happened
Shares of The Trade Desk (TTD 4.15%) took a hit on Monday, falling as much as 10.9%. As of 3:15 p.m. EST, however, the stock was down only 8.6%.
While there didn't seem to be any specific news related to the ad tech company on Monday, the stock's sharp drop can likely be explained by a sell-off in the broader market for many growth stocks.
Image source: Getty Images.
So what
A quick look at the bullish gain for popular market indexes like the S&P 500 and the Nasdaq Composite implies it's an upbeat day in the market. The two indexes are each up about 1% as of this writing.
Many growth stocks like The Trade Desk, however, were hit hard on Monday. It seems one common trait among many of these growth stocks is that their share prices have soared in 2020. The Trade Desk, for instance, is up 210% over the past 12 months, even including today's sell-off.
Growth stocks are likely simply taking a breather from rapid gains that gave many of them returns that crushed the overall market.
Now what
It's never clear how the market will treat growth stocks (or any stock for that matter) in the short term. Investors, therefore, should try to stay focused on the underlying businesses of the stocks in their portfolio rather than their prices. In addition, investors should expect more volatility -- especially from growth stocks, which tend to be more volatile than other stocks.
