What Happened?
Shares of casual sandwich chain Potbelly (NASDAQ: PBPB) jumped 3.2% in the afternoon session after the broader market rallied as Federal Reserve Chairman Jerome Powell signaled a potential interest rate cut in the near future. Speaking to economists, Powell indicated that a marked slowdown in job growth suggests a downward adjustment in the Fed's benchmark rate may be warranted. The prospect of lower interest rates, which can reduce borrowing costs for companies and stimulate the economy, sparked a broad market rally on Friday. This positive sentiment lifted stocks across various sectors, including Potbelly, as investors reacted favorably to the potential for a more accommodative monetary policy.
After the initial pop the shares cooled down to $12.68, up 2.4% from previous close.
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What Is The Market Telling Us
Potbelly’s shares are quite volatile and have had 17 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 21 days ago when the stock dropped 4.7% on the news that a surprisingly weak U.S. jobs report and renewed fears over international trade policy fueled concerns about a slowdown in consumer spending. The July 2025 jobs report revealed that hiring slowed dramatically, with the U.S. economy adding only 73,000 new jobs—the weakest gain in over two years. Furthermore, job numbers for May and June were revised significantly lower, suggesting the labor market is weaker than previously thought. This is a critical headwind for restaurants, as a shaky job market often leads consumers to cut back on discretionary spending like dining out. Compounding the issue, the announcement of new U.S. tariffs on trading partners has heightened fears of inflation and a broader economic slowdown, prompting investors to sell shares in consumer-facing sectors.
Potbelly is up 35.3% since the beginning of the year, and at $12.68 per share, it is trading close to its 52-week high of $13.30 from February 2025. Investors who bought $1,000 worth of Potbelly’s shares 5 years ago would now be looking at an investment worth $2,567.
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