What happened

The broader market was on the upswing after the long weekend, on the heels of a brutal week for stocks. Investor sentiment turned positive Tuesday, helping send a wide range of stocks, including many technology companies, higher.

Shares of Asana (ASAN 0.07%) gained as much as 12.1%, Shopify (SHOP 0.14%) climbed as much as 6.3%, and HubSpot (HUBS 2.55%) surged as much as 6.2%. As of 3:09 p.m. ET, the trio were still trading higher, up 5.6%, 4.1%, and 3.7%, respectively.

So what

The market -- and many individual stocks -- were pummeled last week as investors grew more concerned about the state of the economy. The Federal Reserve took a drastic step in response to those fears, raising the federal funds rate by 75 basis points -- the largest rate hike since 1994 -- in a move designed to cool red-hot inflation. Chair Jerome Powell signaled that additional moves would likely be necessary in the near future, suggesting that a similar rate hike was on the table when the central bank meets again. This helped fuel investor fears regarding the ongoing potential for a recession.

Technology stocks, particularly software-as-a-service (SaaS) companies with high valuations, have been among the hardest hit since the onset of the bear market. HubSpot, Shopify, and Asana haven't been spared from the carnage, with the trio down 65%, 81%, and 87%, respectively, from their November highs. 

If the economy continues to turn south, businesses might be less likely to pony up for HubSpot's customer relationship management software, resulting in slowing growth. Similarly, a worsening of the downturn could hit Shopify's e-commerce sales and Asana's work management platform.

Today's gains by Shopify, HubSpot, and Asana suggest that some investors believe the selling has simply gone too far, and that a possible turnaround is on the horizon. There's no way to know that for sure, though the Fed is leaving no doubt about the potential for additional aggressive moves to bring rampant inflation under control.

Now what

A series of unfortunate events -- pandemic-related supply chain disruptions, wage inflation, and worker shortages -- have all contributed to runaway prices, pushing the U.S. inflation rate to 8.6% in May, notching a fresh 40-year high. 

The Fed is keeping all its options open, with Powell suggesting that another 75-basis-point increase or a 50-basis-point hike would be likely at the next meeting of the central bank. 

It's worth noting that both the S&P 500 and the Nasdaq Composite remain mired in bear market territory, so the worst may not be over. There can be days marked by bullish sentiment followed by further down market days, so investors should prepare themselves for the likelihood that additional declines could follow in short order.

More importantly for long-term investors is the knowledge that corrections and bear markets are all a natural part of the normal market cycle and, like all things, "this too shall pass."

While it's nice to see Shopify, HubSpot, and Asana in the plus column today, investors would be better served setting their sights five to 10 years out, as investing for the long term is the surest path to generating life-changing wealth.