What Happened?

A number of stocks jumped in the afternoon session after a significant drop in crude oil prices helped to ease inflation worries. 

Major indices saw strong gains, with the S&P 500 heading for its best session in weeks, rising over 1%. The rally was connected to a retreat in U.S. crude oil prices, which fell back into the two-figure range. Lower oil prices can lead to reduced transportation costs for businesses and lower fuel prices for consumers, potentially boosting discretionary spending. This positive development lifted investor sentiment across the board, sparking advances in a wide range of sectors as fears of persistent inflation temporarily subsided.

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:

• Modern Fast Food company Portillo's (NASDAQ: PTLO) jumped 5.2%. Is now the time to buy Portillo's? Access our full analysis report here, it’s free.
• Traditional Fast Food company Krispy Kreme (NASDAQ: DNUT) jumped 4.7%. Is now the time to buy Krispy Kreme? Access our full analysis report here, it’s free.
• Modern Fast Food company CAVA (NYSE: CAVA) jumped 6.6%. Is now the time to buy CAVA? Access our full analysis report here, it’s free.
• Modern Fast Food company Sweetgreen (NYSE: SG) jumped 6.9%. Is now the time to buy Sweetgreen? Access our full analysis report here, it’s free.
• Modern Fast Food company Chipotle (NYSE: CMG) jumped 4%. Is now the time to buy Chipotle? Access our full analysis report here, it’s free.

Zooming In On Sweetgreen (SG)

Sweetgreen’s shares are extremely volatile and have had 55 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 4 days ago when the stock dropped 5.2% on the news that crude oil prices surged past $100 per barrel due to geopolitical conflict, sparking concerns over rising operational costs and a potential decline in consumer spending. The spike in oil prices triggered anxiety across the food service industry, which relies heavily on commercial Liquefied Petroleum Gas (LPG) for daily operations. Analysts warned that energy supply chains were vulnerable, and any disruption could lead to higher fuel costs for restaurants, squeezing already thin profit margins. At the same time, rising gasoline prices threatened to reduce consumer discretionary spending.

Sweetgreen is down 17.1% since the beginning of the year, and at $5.75 per share, it is trading 78.3% below its 52-week high of $26.53 from March 2025. Investors who bought $1,000 worth of Sweetgreen’s shares at the IPO in November 2021 would now be looking at an investment worth $116.06.

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