Why Zoom Video Stock Is Trading Higher

BY Benzinga | TREASURY | 07/05/22 01:00 PM EDT

Zoom Video Communications Inc (NASDAQ:ZM) shares are trading higher Tuesday amid a drop in yields. 

Treasury yields are falling amid economic growth concerns. The Federal Reserve is in the midst of what is expected to be its most aggressive tightening cycle in more than 40 years as the central bank attempts to tame runaway inflation. Investors continue to worry about rising inflation and the potential for higher rates to cause a recession. 

Lower rates increase the present value of future cash flows, which can positively impact the valuations of growth stocks. The 10-Year Treasury yield was hovering around 2.79% at press time.

See Also: What's Going On With Exxon Mobil Shares Falling Today?

ZM Price Action: Zoom Video has traded between $406.48 and $79.03 over a 52-week period.

The stock was up 5.83% at $117.44 at press time, according to data from Benzinga Pro.

Photo: courtesy of Zoom Video.

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.