What Happened?
A number of stocks jumped in the afternoon session after the July jobs report showed an unexpected loss of 23,000 jobs, signaling a cooling labor market.
Economists had forecast a gain of around 80,000 nonfarm payrolls. According to the U.S. Bureau of Labor Statistics, the unemployment rate held steady at 4.1%. This weaker-than-expected data led investors to bet on the possibility of an interest rate cut by the Federal Reserve. The logic, often described as "bad news is good news" for the market, suggests that a slowing economy could deter the central bank from further rate hikes, and potentially encourage cuts to stimulate growth. This outlook generally makes borrowing cheaper for companies and increases the relative attractiveness of stocks.
Lower rates are particularly beneficial for growth companies because they reduce the discount rate applied to future earnings, boosting the present value of cash flows that extend further out.
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:
- Electronic Components company Corning (NYSE: GLW) jumped 6.4%. Is now the time to buy Corning? Access our full analysis report here, it’s free.
- Renewable Energy company Sunrun (NASDAQ: RUN) jumped 8.4%. Is now the time to buy Sunrun? Access our full analysis report here, it’s free.
- Financial Technology company Coinbase (NASDAQ: COIN) jumped 5.2%. Is now the time to buy Coinbase? Access our full analysis report here, it’s free.
- Home Construction Materials company Builders FirstSource (NYSE: BLDR) jumped 2.6%. Is now the time to buy Builders FirstSource? Access our full analysis report here, it’s free.
- Heavy Transportation Equipment company Blue Bird (NASDAQ: BLBD) jumped 2%. Is now the time to buy Blue Bird? Access our full analysis report here, it’s free.
Zooming In On Sunrun (RUN)
Sunrun’s shares are extremely volatile and have had 66 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 biggest move we wrote about over the last year was 5 months ago when the stock dropped 36.1% on the news that it reported its fourth-quarter earnings, as a weak outlook and concerning financial metrics overshadowed strong headline results. The company beat Wall Street estimates, reporting impressive revenue of $1.16 billion, up 124% year-over-year, and a surprise profit with earnings per share of $0.38. However, investors focused on the company's future prospects and financial health. Analysts' forecasts pointed to a 13% revenue decline over the next 12 months and a return to negative earnings per share. Furthermore, Sunrun's cash burn worsened, with negative free cash flow increasing to $312.7 million for the quarter. This, coupled with the company's significant debt load, fueled concerns about its long-term profitability and financial stability.
Sunrun is down 47.5% since the beginning of the year, and at $10.21 per share, it is trading 52.3% below its 52-week high of $21.41 from January 2026. Investors who bought $1,000 worth of Sunrun’s shares 5 years ago would now be looking at only $199.57.
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