What Happened?
A number of stocks fell in the afternoon session after the Bureau of Labor Statistics revealed that the economy added significantly fewer jobs than previously reported over the last year.
The U.S. Bureau of Labor Statistics (BLS) issued a preliminary benchmark revision indicating that nonfarm employment was overstated by 911,000 jobs for the 12 months ending in March 2025. This routine but significant adjustment suggests the labor market has been considerably weaker than initial monthly reports suggested. Such a large downward revision can be a key indicator of a cooling economy. For investors, this news is mixed; while a slowdown could prompt the Federal Reserve to consider interest rate cuts, it also heightens concerns about a potential recession. The report noted that the professional and business services and manufacturing sectors saw notable downward revisions, signaling specific areas of weakness.
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:
- Hardware & Infrastructure company Xerox (NASDAQ:XRX) fell 2.9%. Is now the time to buy Xerox? Access our full analysis report here, it’s free.
- Office & Commercial Furniture company HNI (NYSE:HNI) fell 2.7%. Is now the time to buy HNI? Access our full analysis report here, it’s free.
Zooming In On Xerox (XRX)
Xerox’s shares are extremely volatile and have had 36 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 7 days ago when the stock dropped 4.4% on the news that the stock fell amid a broader market downturn driven by pressure from the bond market and weakness in technology stocks. Investors reacted to a federal court ruling that most of President Trump's global tariffs were illegal, raising uncertainty over trade policy and the fiscal impact of potential refunds. Rising Treasury yields added to the pressure, with the 10-year climbing above 4.2% and the 30-year nearing 5%, intensifying worries about stretched equity valuations. September's historically weak track record for stocks further dampened sentiment, leaving traders cautious ahead of the jobs report later in the week and the Federal Reserve's upcoming rate decision.
Xerox is down 55.1% since the beginning of the year, and at $3.71 per share, it is trading 66.5% below its 52-week high of $11.07 from October 2024. Investors who bought $1,000 worth of Xerox’s shares 5 years ago would now be looking at an investment worth $195.16.
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