What happened
Investors extended their optimism in the market Tuesday after pushing stocks higher Monday. That helped fuel Upstart Holdings' (UPST 2.89%) share price gains this morning, as investors took their cue from better-than-expected bank earnings over the past two days.
As a result, the S&P 500 rose 1.8% this morning, the tech-heavy Nasdaq Composite jumped 1.9%, and Upstart's stock followed suit by climbing 5.4% as of 10:31 a.m. ET.
So what
Yesterday, investors were enthusiastic about the market in general after Bank of America and Bank of New York Mellon reported better-than-expected quarterly results. Then today, Goldman Sachs' third-quarter earnings and revenue topped analysts' consensus estimates.
Image source: Getty Images.
Investors across all sectors looked at the financial results of these banks and have used them as a gauge for the overall economy. The thinking is that if the banks are performing well then perhaps the U.S. economy isn't in as bad of shape as some investors had feared.
And, more specifically, Upstart shareholders are likely looking at the latest bank earnings and thinking that the financial industry is still strong and they may not need to worry about a slowdown in Upstart's lending platform.
Whether that's true or not is yet to be proven, but investors are jumping on any positive news they can find right now after the market has experienced a massive sell-off over the past year.
NASDAQ: UPST
Key Data Points
Now what
Investors will get a clearer picture of how Upstart is doing when the company reports its third-quarter financial results on Nov. 8.
But Upstart investors probably shouldn't hold onto the company's latest share price gains too tightly. Last week's consumer price data showed that inflation continued rising despite ongoing and large interest rate hikes by the Federal Reserve.
With inflation still moving in the wrong direction, the Fed is likely to issue more rate hikes, which could significantly slow down the economy and bring more stock price declines in the near term.
