What Happened?
A number of stocks fell in the afternoon session after the major indices continued to retreat amid profit-taking and renewed concerns about tariffs.
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.
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:
- Semiconductor Manufacturing company Kulicke and Soffa (NASDAQ: KLIC) fell 3.4%. Is now the time to buy Kulicke and Soffa? Access our full analysis report here, it’s free.
- Home Improvement Retailer company Floor And Decor (NYSE: FND) fell 4%. Is now the time to buy Floor And Decor? Access our full analysis report here, it’s free.
- Home Furniture Retailer company Sleep Number (NASDAQ: SNBR) fell 5.4%. Is now the time to buy Sleep Number? Access our full analysis report here, it’s free.
- Footwear company Nike (NYSE: NKE) fell 4.1%. Is now the time to buy Nike? Access our full analysis report here, it’s free.
- Toys and Electronics company Funko (NASDAQ: FNKO) fell 5.9%. Is now the time to buy Funko? Access our full analysis report here, it’s free.
Zooming In On Funko (FNKO)
Funko’s shares are extremely volatile and have had 50 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 14 days ago when the stock dropped 5.8% on the news that investors took some profits off the table as markets awaited signals on future monetary policy from the Federal Reserve's Jackson Hole symposium later in the week.
The downturn in the market was largely attributed to a significant sell-off in megacap tech and chipmaker shares. Nvidia, Advanced Micro Devices (AMD), and Broadcom all saw notable drops, dragging down the VanEck Semiconductor ETF. Other major tech-related companies like Tesla, Meta Platforms, and Netflix were also under pressure. A key reason for this trend is that much of the recent market gains have been concentrated in the "AI trade," which includes these large technology and semiconductor companies. So this could also mean that some investors are locking in some gains ahead of more definitive feedback from the Fed.
Funko is down 75.7% since the beginning of the year, and at $3.31 per share, it is trading 77.2% below its 52-week high of $14.50 from January 2025. Investors who bought $1,000 worth of Funko’s shares 5 years ago would now be looking at an investment worth $519.62.
Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.
