What happened

Okta (OKTA 2.20%) investors trounced the market early Monday as the stock gained 7% by 12:30 p.m. ET, compared to a 2.7% spike in the S&P 500. That boost erased some of the identity management software specialist's recent losses, but shares remain in deeply negative territory for the year. Okta is down 77% since the start of 2022, in fact.

That wider decline set the stage for today's stock price spike, which appeared as investors turned more optimistic about stocks in general.

So what

Okta benefited from a wide market rally that lifted many other hard-hit stocks. The Nasdaq index had shot higher by 3.6% by 12:30 p.m. ET, with many of its constituents posting sharp rebounds. Wall Street celebrated positive earnings news from Bank of America as an early part of Q3 earnings season. Given Okta's slump of nearly 80% in 2022 heading into this week, it makes sense that the stock would see a bigger lift once investors' sentiment shifted back toward the positive.

Okta's business is sensitive to economic growth rates in key markets like the U.S. and Europe. The company depends on rising spending, especially by large enterprises.

Gains in these areas helped revenue rise 44% in the most recent quarter, although that rate was below management's expectations. Okta in late August cited macroeconomic headwinds as a key factor pressuring that result. A brighter global growth outlook, on the other hand, might remove those pressures.

Now what

Okta will announce its Q3 results in late November or early December. That report will include updates on the global selling environment, but also on the integration of the Auth0 business into the wider Okta platform. Challenges here have contributed to weaker growth and earnings, along with slower customer additions.

Okta's ability to fix these problems will ultimately drive the stock's returns over the next few quarters. In the meantime, shares are likely to see amplified moves -- in either direction -- on volatile market days like today. Look for the software-as-a-service stock to remain volatile at least through its next earnings report.