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Why MongoDB Stock Is Falling Today

By Chris Neiger – Oct 4, 2021 at 11:01AM

Key Points

  • Technology investors are concerned about rising 10-year Treasury yields.
  • MongoDB's stock is falling as some investors sell fast-growing tech stocks today.

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The company's shares are sliding as part of a broader market sell-off.

What happened

Shares of MongoDB (MDB 3.67%), a database platform company, were tumbling this morning on no company-specific news. Some investors were likely exiting their MongoDB position as part of a broader sell-off of technology stocks

MongoDB's stock fell by as much as 6.1% this morning and was down by 5.9% as of 10:19 a.m. EDT.  

So what 

Tech investors have been keeping a close eye on rising 10-year Treasury yields since September. Rising yields can hurt some of the long-term growth potential of fast-growing tech companies because higher yields mean that a company's future profits are not worth as much right now.

Two people looking at a graph.

Image source: Getty Images.

The 10-year Treasury yield inched higher today to 1.5%, which is likely the reason why some investors sold MongoDB's shares, and why the tech-heavy Nasdaq Composite was down by 1.4% as of this writing. Last week, the yields reached 1.56%, their highest level since June.

Investors are also generally anxious right now that inflation may be running too far ahead of the Federal Reserve's 2% target.

Now what 

While it's not fun to see a stock's price fall 6% in one day, MongoDB investors should remember that today's share price slump has nothing to do with the company's long-term growth potential. 

MongoDB shares are still up nearly 90% over the past 12 months and today's fall should be viewed for what it is -- a broader tech sector sell-off in response to rising Treasury yields -- and not an underlying problem with MongoDB's business. 

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends MongoDB. The Motley Fool has a disclosure policy.

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