What Happened?
A number of stocks jumped in the afternoon session after President Trump extended a ceasefire with Iran. The positive sentiment was reflected across the board, with the S&P 500, Dow Jones Industrial Average, and Nasdaq 100 all showing significant gains.
This development has provided a degree of relief to investors, reducing geopolitical uncertainty that had been weighing on the markets. A de-escalation in tensions is generally viewed as favorable for global economic stability, encouraging investment in riskier assets like equities as the perceived threat of a wider conflict diminishes.
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:
- Sit-Down Dining company Dine Brands (NYSE: DIN) jumped 3.7%. Is now the time to buy Dine Brands? Access our full analysis report here, it’s free.
- Sit-Down Dining company First Watch (NASDAQ: FWRG) jumped 4.5%. Is now the time to buy First Watch? Access our full analysis report here, it’s free.
Zooming In On First Watch (FWRG)
First Watch’s shares are very volatile and have had 28 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 5 days ago when the stock gained 5% on the news that Iran announced the reopening of the Strait of Hormuz, which triggered a sharp drop in crude oil prices and signaled an easing of inflationary pressures on operating margins.
For the restaurant industry, lower oil costs translate directly into cheaper delivery and supply chain logistics. Also, decreased fuel prices at the pump act as an effective "tax cut" for consumers, boosting discretionary income and encouraging higher foot traffic for casual and fine dining establishments alike.
First Watch is down 14% since the beginning of the year, and at $13.22 per share, it is trading 33.9% below its 52-week high of $20 from April 2025. Investors who bought $1,000 worth of First Watch’s shares at the IPO in September 2021 would now be looking at an investment worth $597.56.
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