What Happened?
A number of stocks fell in the afternoon session after a significant downward revision of U.S. job creation data raised concerns about the health of the economy.
The Labor Department reported that employers added 911,000 fewer jobs from April 2024 through March 2025 than initially estimated. This revision brings the average monthly job gains during that period down significantly, suggesting a cooler labor market. The downgrades were widespread across various service sectors. The largest revisions were seen in leisure and hospitality, which added 176,000 fewer jobs than first reported, followed by professional and business services and retail. Such data is closely watched by investors and economists as it can influence the Federal Reserve's decisions on interest rates.
JPMorgan Chase CEO Jamie Dimon added that the U.S. economy is "weakening," though he stopped short of predicting a recession. "Whether it's on the way to recession or just weakening, I don't know," he said. Dimon's remarks are closely watched, given his influence as head of one of the nation's largest banks.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Sports & Outdoor Equipment Retailer company Sportsman's Warehouse (NASDAQ:SPWH) fell 7.9%. Is now the time to buy Sportsman's Warehouse? Access our full analysis report here, it’s free.
- Auto Parts Retailer company Advance Auto Parts (NYSE:AAP) fell 4.3%. Is now the time to buy Advance Auto Parts? Access our full analysis report here, it’s free.
- Auto Parts Retailer company Monro (NASDAQ:MNRO) fell 4.5%. Is now the time to buy Monro? Access our full analysis report here, it’s free.
Zooming In On Sportsman's Warehouse (SPWH)
Sportsman's Warehouse’s shares are extremely volatile and have had 80 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was about 23 hours ago when the stock dropped 6.1% on the news that continued negative momentum as the company delivered mixed second-quarter results that highlighted ongoing operational and financial challenges. Although the company posted modest sales growth, it continued to suffer from margin pressure, leading to persistent net losses. These losses are shrinking the company's cash runway and raising concerns about its financial sustainability. Furthermore, both inventory and debt levels have increased significantly, adding to the risk profile, especially if consumer demand weakens. The focus has now shifted to debt repayment over growth initiatives. Due to these factors, including limited earnings power and high risk, at least one analyst has maintained a "Hold" rating, viewing the stock as not attractively valued under the current conditions.
Sportsman's Warehouse is up 16% since the beginning of the year, but at $2.98 per share, it is still trading 28.4% below its 52-week high of $4.16 from June 2025. Investors who bought $1,000 worth of Sportsman's Warehouse’s shares 5 years ago would now be looking at an investment worth $219.85.
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