Shares of automation software company UiPath Inc. (PATH) plummeted 7.15% in intraday trading on Wednesday, after the Federal Reserve signaled fewer interest rate cuts ahead than expected for 2025.
The Fed raised rates by 0.25% to a target range of 4.25%-4.5%, in line with forecasts. However, policymakers projected just two quarter-point rate cuts in 2025, suggesting a slower pace of future easing than markets anticipated. This outlook weighed on high-growth technology stocks like UiPath, which are more sensitive to changes in future interest rates due to their valuations being heavily dependent on cash flows further out in the future.
UiPath's decline reflects investor concerns that higher interest rates for longer could temper the growth prospects and valuations of companies in the software automation sector. Despite the Fed's data-driven approach, the path of future rate moves remains uncertain, leaving room for continued volatility in rate-sensitive areas of the market.
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