Airbnb (NASDAQ:ABNB)
The latest inflation statistics indicated that consumer prices climbed more than anticipated in September, leading investors to sell Airbnb stock this morning.
The travel stock dropped by as much as 6.3% in early trade due to the S&P 500’s 0.6% and the tech-heavy Nasdaq Composite’s 1.2% morning losses due to the inflation report. As of 11:19 a.m. ET, Airbnb’s stock had recovered somewhat, falling by just 1.3%.
What’s the Reason?
The latest inflation statistics from the Bureau of Labor Statistics were published today, showing that consumer prices grew by 0.4% in September. This was more than the 0.3% rise that was expected by economists. Year over year, consumer price indexes rose 8.2% and are already around a 40-year high.
As a result, the whole market index fell sharply today, and Airbnb stock fell with it. Investors in Airbnb (NASDAQ:ABNB) are concerned that the Federal Reserve may raise the federal funds 75 basis points at its upcoming two meetings in response to recent inflation statistics (which will occur in November and December).
Investors in Airbnb stock are worried that a downturn in the economy might reduce consumer spending on travel, which would be bad for Airbnb (NASDAQ:ABNB). A recession could be triggered by further aggressive interest rate hikes.
What’s Next?
In line with the general decline in stock prices, Airbnb’s stock price has been down 36% in the last year.
Travel spending might be hurt by a recession. Still, Airbnb (NASDAQ:ABNB) has previously survived difficult periods (COVID-related shutdowns) and emerged with a thriving travel business.
Inventors may suffer temporarily as they digest the most recent inflation data and the Federal Reserve’s response to it. Still, suppose Airbnb stock responds to the most recent challenges with the same resilience it did at the height of the pandemic. If that’s the case, it might show to be a worthwhile investment in the long run.
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Investors in Airbnb stock are concerned that more aggressive interest rate rises will likely occur soon.
Featured Image – Unsplash © Oberon Copeland
Author Shariq Khan 
