What Happened?

A number of stocks fell in the morning session after a surprisingly weak July jobs report and the announcement of sweeping new tariffs fueled fears of an economic slowdown and an impending interest rate cut. 

The U.S. economy added just 73,000 jobs in July, the weakest gain in over two years, while the unemployment rate rose to 4.2%. This dismal data significantly increased market expectations for a Federal Reserve interest rate cut, with traders now pricing in an 80% probability of a cut in September. Lower interest rates typically harm bank profitability by compressing their net interest margins—the difference between what they earn on loans and pay on deposits. Compounding these worries, the announcement of new tariffs on imports from 92 countries has sparked fears of a global trade war, which could further dampen economic growth and disrupt supply chains, creating a challenging environment for the banking industry.

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:

• Regional Banks company First Financial Bankshares (NASDAQ: FFIN) fell 3.1%. Is now the time to buy First Financial Bankshares? Access our full analysis report here, it’s free.
• Regional Banks company First Busey (NASDAQ: BUSE) fell 3.1%. Is now the time to buy First Busey? Access our full analysis report here, it’s free.
• Regional Banks company First BanCorp (NYSE: FBP) fell 3.1%. Is now the time to buy First BanCorp? Access our full analysis report here, it’s free.
• Regional Banks company First Bancorp (NASDAQ: FBNC) fell 3.1%. Is now the time to buy First Bancorp? Access our full analysis report here, it’s free.
• Regional Banks company FB Financial (NYSE: FBK) fell 3%. Is now the time to buy FB Financial? Access our full analysis report here, it’s free.

Zooming In On First Financial Bankshares (FFIN)

First Financial Bankshares’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

First Financial Bankshares is down 4.8% since the beginning of the year, and at $33.86 per share, it is trading 21.3% below its 52-week high of $43.05 from November 2024. Investors who bought $1,000 worth of First Financial Bankshares’s shares 5 years ago would now be looking at an investment worth $1,128.

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