What Happened?

A number of stocks jumped in the afternoon session after the second quarter (2025) earnings season got off to a strong start. 

Quarterly earnings reports released during the week exceeded Wall Street's expectations, fueling investor confidence. Around 50 S&P 500 components reported, with 88% of those exceeding analysts' expectations, FactSet data revealed. Investors were also encouraged by several positive reports that painted a picture of a resilient consumer. One key report revealed that shoppers increased their spending at U.S. retailers more than economists had anticipated. Precisely, retail sales increased 0.6% from May, surpassing the 0.2% estimate. This robust consumer spending is a crucial pillar supporting the economy. 

Adding to the positive sentiment, the latest data on unemployment claims showed a decrease in the number of workers applying for benefits, signaling that layoffs remain limited and the job market is steady. This combination of strong earnings reports, retail sales, and a solid labor market suggests the economy is navigating challenges successfully.

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 Academy Sports (NASDAQ: ASO) jumped 4.2%. Is now the time to buy Academy Sports? Access our full analysis report here, it’s free.
• Traditional Fast Food company Jack in the Box (NASDAQ: JACK) jumped 6%. Is now the time to buy Jack in the Box? Access our full analysis report here, it’s free.
• Casino Operator company PENN Entertainment (NASDAQ: PENN) jumped 3.6%. Is now the time to buy PENN Entertainment? Access our full analysis report here, it’s free.
• Leisure Facilities company Sphere Entertainment (NYSE: SPHR) jumped 4.2%. Is now the time to buy Sphere Entertainment? Access our full analysis report here, it’s free.
• Regional Banks company Hilltop Holdings (NYSE: HTH) jumped 3.3%. Is now the time to buy Hilltop Holdings? Access our full analysis report here, it’s free.

Zooming In On Jack in the Box (JACK)

Jack in the Box’s shares are extremely volatile and have had 32 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 3 days ago when the stock dropped 6% on the news that an activist investor signaled a potential push for changes at the fast-food chain. Investor Sardar Biglari, who recently increased his stake in the company to 9.9%, has changed his status to an activist investor. This move signals a potential campaign for changes to the company's operations, board composition, or capital structure. The development follows the company's adoption of a "poison pill," a defensive strategy to prevent a hostile takeover. This shareholder rights plan was put in place after Biglari increased his ownership. The fast-food giant is currently implementing a turnaround plan called “JACK on Track,” which includes closing underperforming restaurants and paying down debt. The increased pressure from an activist investor adds another layer of uncertainty for the company, which has been dealing with declining same-store sales. In its most recent quarterly report, Jack in the Box reported a 4.4% decrease in same-store sales.

Jack in the Box is down 46.7% since the beginning of the year, and at $21.84 per share, it is trading 63.7% below its 52-week high of $60.07 from July 2024. Investors who bought $1,000 worth of Jack in the Box’s shares 5 years ago would now be looking at an investment worth $281.96.

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