What Happened?
A number of stocks fell in the afternoon session after heavyweight stocks retreated, pulling back from recent record highs as the year-end rally showed signs of fatigue.
The S&P 500 and Nasdaq were under pressure as the dominant artificial intelligence trade cooled off. Notable names like Nvidia were down as traders locked in profits following a banner year where the Nasdaq surged over 20%. With the S&P 500 recently hitting intraday highs near 6,945, this dip reflected a shift in internal momentum rather than a response to major economic news.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Consumer Subscription company Chegg (NYSE: CHGG) fell 3.3%. Is now the time to buy Chegg? Access our full analysis report here, it’s free for active Edge members.
- Video Gaming company Skillz (NYSE: SKLZ) fell 3.4%. Is now the time to buy Skillz? Access our full analysis report here, it’s free for active Edge members.
- Online Marketplace company Teladoc (NYSE: TDOC) fell 2.7%. Is now the time to buy Teladoc? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Skillz (SKLZ)
Skillz’s shares are extremely volatile and have had 46 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 11 days ago when the stock gained 2.6% on the news that the latest Consumer Price Index (CPI) report showed inflation cooling more than anticipated, fueling optimism for potential Federal Reserve interest rate cuts.
The November report indicated that annual inflation fell to 2.7%, significantly below economists' expectations of 3.1% and its lowest level since July. The Consumer Price Index, or CPI, is a key measure of inflation. This encouraging data was welcomed by investors, as sustained lower inflation could give the U.S. Federal Reserve more justification to lower interest rates in the coming year. Wall Street favors lower interest rates because they reduce borrowing costs for companies and can stimulate economic activity, making stocks more attractive. The positive news helped major indexes, including the S&P 500 and the tech-heavy Nasdaq, snap a four-day losing streak.
Skillz is down 15.4% since the beginning of the year, and at $4.51 per share, it is trading 50.4% below its 52-week high of $9.09 from August 2025. Investors who bought $1,000 worth of Skillz’s shares 5 years ago would now be looking at an investment worth $10.94.
Microsoft, Alphabet, Coca-Cola, Monster Beverage—all began as under-the-radar growth stories riding a massive trend. We’ve identified the next one: a profitable AI semiconductor play Wall Street is still overlooking.Go here for access to our full report.
