Why Opendoor Technologies Stock Popped Again Today

Key Points

• There was no news out on the home flipper, but the volatility in the stock continued.

• Investors looked forward to the Federal Reserve rate decision.

• CEO Kaz Nejatian had his first day on the job.

• 10 stocks we like better than Opendoor Technologies ›

Shares of Opendoor Technologies (NASDAQ: OPEN) were moving higher today, even as there was no news out on the volatile online home flipper.

Instead, investors seemed to be looking forward to Wednesday's rate decision from the Federal Reserve, which will include commentary and a forecast on future rate cuts. Investors widely expect the central bank to cut the federal funds rate by 25 basis points on Wednesday. CEO Kaz Nejatian also began his first day on the job.

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As of 10:33 a.m. ET, Opendoor stock was up 11.5%.

Image source: Getty Images.

What the Fed rate decision means for Opendoor

Since its business is so closely tied to the housing market, few stocks seem to have more to gain from falling rates than Opendoor does, as housing is likely to bounce back as rates come down.

In addition to the expected rate cut of 25 basis points, we'll also get some insight into the direction of future rate cuts, as the Fed will also release its quarterly "dot plot" projections, in addition to Fed chair Jerome Powell's commentary at the press conference.

Back in June, the Fed had forecast 50 basis points of cuts this year, but that forecast could change as the labor market has softened substantially in the last couple of months.

New Opendoor CEO Kaz Nejatian is also starting in the job today, and co-founder Keith Rabois is back as chairman, which is likely to accelerate changes in the business.

What's next for Opendoor?

Opendoor's volatility will almost certainly continue through the coming weeks and months, as it's turned into a meme stock, but one with a legitimate chance at a turnaround now with new leadership in place and interest rates expected to fall.

Expect the stock to swing on Wednesday as well. While the rate cut is likely priced in at this point, the stock will move based on commentary and the forecast from the Fed.

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.