What Happened?

A number of stocks fell in the afternoon session after 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.

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:

• Traditional Fast Food company Starbucks (NASDAQ: SBUX) fell 4%. Is now the time to buy Starbucks? Access our full analysis report here, it’s free.
• Modern Fast Food company CAVA (NYSE: CAVA) fell 5.1%. Is now the time to buy CAVA? Access our full analysis report here, it’s free.
• Modern Fast Food company Shake Shack (NYSE: SHAK) fell 6.1%. Is now the time to buy Shake Shack? Access our full analysis report here, it’s free.
• Sit-Down Dining company Bloomin' Brands (NASDAQ: BLMN) fell 4.4%. Is now the time to buy Bloomin' Brands? Access our full analysis report here, it’s free.
• Sit-Down Dining company Cracker Barrel (NASDAQ: CBRL) fell 5%. Is now the time to buy Cracker Barrel? Access our full analysis report here, it’s free.

Zooming In On Shake Shack (SHAK)

Shake Shack’s shares are very volatile and have had 27 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 1 day ago when the stock dropped 12.9% on the news that the company reported second-quarter results that beat analyst estimates but provided a weaker-than-expected outlook. 

The burger chain posted better-than-expected second-quarter profit and revenue. However, investors looked past the headline numbers and focused on weaker underlying trends. Same-Shack sales, which track revenue from stores open for at least a year, grew 1.8%. This figure missed analyst expectations of 2.2% growth and represented a slowdown from the prior year. 

Additionally, the company provided a revenue forecast for the third quarter that fell short of Wall Street's estimates, raising concerns about future performance. The disappointing outlook arrived as broader economic reports showed rising inflation, which fueled worries that consumers might cut back on discretionary spending like dining out.

Shake Shack is down 15% since the beginning of the year, and at $113.38 per share, it is trading 20.2% below its 52-week high of $142.03 from July 2025. Investors who bought $1,000 worth of Shake Shack’s shares 5 years ago would now be looking at an investment worth $2,294.

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