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:
- Ground Transportation company RXO (NYSE: RXO) jumped 6.3%. Is now the time to buy RXO? Access our full analysis report here, it’s free.
- Facility Services company BrightView (NYSE: BV) jumped 5%. Is now the time to buy BrightView? Access our full analysis report here, it’s free.
- Specialty Equipment Distributors company SiteOne (NYSE: SITE) jumped 5.7%. Is now the time to buy SiteOne? Access our full analysis report here, it’s free.
- Automation Software company ServiceNow (NYSE: NOW) jumped 6.3%. Is now the time to buy ServiceNow? Access our full analysis report here, it’s free.
- Aerospace company Rocket Lab (NASDAQ: RKLB) jumped 9.2%. Is now the time to buy Rocket Lab? Access our full analysis report here, it’s free.
Zooming In On Rocket Lab (RKLB)
Rocket Lab’s shares are extremely volatile and have had 87 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 11 days ago when the stock gained 1.9% on the news that the company announced it was awarded its largest launch contract to date, a $266 million multi-launch deal with the U.S. Space Force. The landmark contract, awarded by the Space Systems Command's Rocket Systems Launch Program, includes 12 suborbital launches with an option for six additional missions. This agreement strengthens Rocket Lab's national security business and solidifies its role as a key provider for programs of significant national importance. The first mission under this new contract is scheduled for no earlier than the end of 2026.
Rocket Lab is up 7.9% since the beginning of the year, but at $81.98 per share, it is still trading 45.4% below its 52-week high of $150.23 from May 2026. Investors who bought $1,000 worth of Rocket Lab’s shares 5 years ago would now be looking at an investment worth $7,914.
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