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Arm Holdings PLC – ADR (NASDAQ:ARM) shares are trading lower by 4.9% to $117.05 during Friday’s session. Shares of semiconductor, hardware and AI-linked stocks are trading lower as the sector continues to pull back. Chip stocks may also be down in sympathy with Broadcom Inc, which fell after reporting earnings.
The Significance of Jobs Data For ARM: Friday’s jobs report showed a smaller increase in nonfarm payrolls than expected. This could have led traders to reassess their expectations for a Federal Reserve interest rate cut.
Originally, there was a 43% probability of a 50-basis-point cut. The weaker-than-expected job growth might have led to a reassessment of these expectations. If traders believe the Fed might not cut rates as aggressively as anticipated, it could impact growth stocks like ARM.
Read Also: Friday’s Jobs Report Is ‘The Moment We’ve All Been Waiting For,’ Economist Says
Why Interest Rates Matter: ARM's revenue and profitability can be indirectly affected by changes in interest rates. While Arm doesn't directly borrow in the same way a manufacturing firm might, changes in interest rates can affect the broader investment climate and capital costs for its partners and customers.
If interest rates remain high or are cut at a lower-than-expected pace, it could impact the willingness or ability of ARM's licensees to invest in new technology or expand their product lines.
Should the jobs report lead to a reassessment of the Fed’s interest rate policy, it can lead to increased volatility.
By now you're likely curious about how to participate in the market for ARM Holdings – be it to purchase shares, or even attempt to bet against the company.
Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy ‘fractional shares,' which allows you to own portions of stock without buying an entire share. For example, some stock, like Berkshire Hathaway, can cost thousands of dollars to own just one share. However, if you only want to invest a fraction of that, brokerages will allow you to do so.
Arm Holdings, which is trading at $117 as of publishing time, $100 would buy you 0.84 shares of stock.
If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to ‘go short' a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.
According to data from Benzinga Pro, Arm has a 52-week high of $188.75 and a 52-week low of $46.50.
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Posted In: ARM
