What Happened?

A number of stocks fell in the morning session as the broader market tumbled in the morning session after a surprisingly weak U.S. jobs report and the announcement of new, widespread tariffs on imported goods. The U.S. economy added only 73,000 jobs in July, falling far short of the 109,000 forecast. Compounding the issue, job gains for May and June were revised down by a combined 258,000, signaling what some see as “increasing signs of fragility” in the labor market. Simultaneously, the White House announced new tariffs, ranging from 10% to 41%, on goods from 92 countries. This “double whammy” of negative news has intensified fears that ongoing trade wars are damaging the U.S. economy. The combination of a weaker labor market and new trade barriers has rattled investor confidence, fueling expectations that the Federal Reserve may be forced to cut interest rates to support the economy.

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:

• Beauty and Cosmetics Retailer company Warby Parker (NYSE: WRBY) fell 3.7%. Is now the time to buy Warby Parker? Access our full analysis report here, it’s free.
• Specialty Retail company Petco (NASDAQ: WOOF) fell 3.6%. Is now the time to buy Petco? Access our full analysis report here, it’s free.
• Apparel Retailer company Tilly's (NYSE: TLYS) fell 7.2%. Is now the time to buy Tilly's? Access our full analysis report here, it’s free.
• Apparel Retailer company Abercrombie and Fitch (NYSE: ANF) fell 4.2%. Is now the time to buy Abercrombie and Fitch? Access our full analysis report here, it’s free.
• Home Furniture Retailer company RH (NYSE: RH) fell 3.2%. Is now the time to buy RH? Access our full analysis report here, it’s free.

Zooming In On Tilly's (TLYS)

Tilly’s shares are extremely volatile and have had 72 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 8.5% as reports pointed to a broad-based weakening of consumer health, highlighted by rising loan delinquencies and falling spending intentions. This downturn was fueled by multiple reports signaling a deteriorating financial situation for consumers. Data revealed that even upper-income Americans are increasingly falling behind on credit card and auto loan payments, suggesting big-ticket spending is fading. Further dampening sentiment, the latest Consumer Confidence report, despite a headline increase, showed that consumers are being more cautious. The auto sector also flashed warning signs, with projections for July showing flat sales compared to last year, weighed down by high prices and interest rates.

Tilly's is down 62.5% since the beginning of the year, and at $1.71 per share, it is trading 71% below its 52-week high of $5.90 from August 2024. Investors who bought $1,000 worth of Tilly’s shares 5 years ago would now be looking at an investment worth $289.34.

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