What Happened?
A number of stocks fell in the afternoon session after a surprisingly weak August jobs report revealed the U.S. economy added far fewer jobs than anticipated. The Bureau of Labor Statistics reported that non-farm payrolls rose by just 22,000, significantly missing the 75,000 expected by economists. Compounding the concerns, the unemployment rate climbed to 4.3%, its highest level in nearly four years. The report also included downward revisions to previous months' data, with June now showing the first net job loss since 2020. While a cooling labor market could encourage the Federal Reserve to cut interest rates, investors reacted negatively. The sharp slowdown in hiring sparked fears of a broader economic downturn, causing stocks to fall as the market weighed whether the Fed's potential actions would be enough to prevent a recession.
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:
- Construction and Maintenance Services company Comfort Systems (NYSE: FIX) fell 3.5%. Is now the time to buy Comfort Systems? Access our full analysis report here, it’s free.
- Engineering and Design Services company Sterling (NASDAQ: STRL) fell 3.2%. Is now the time to buy Sterling? Access our full analysis report here, it’s free.
- Engineering and Design Services company EMCOR (NYSE: EME) fell 3.2%. Is now the time to buy EMCOR? Access our full analysis report here, it’s free.
- Construction and Maintenance Services company MYR Group (NASDAQ: MYRG) fell 2.8%. Is now the time to buy MYR Group? Access our full analysis report here, it’s free.
- Engineering and Design Services company Dycom (NYSE: DY) fell 2.8%. Is now the time to buy Dycom? Access our full analysis report here, it’s free.
Zooming In On Comfort Systems (FIX)
Comfort Systems’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 7 days ago when the stock dropped 5% on the news that markets pulled back with the decline concentrated in the tech space as investors engaged in profit-taking following a robust week that saw the S&P 500 hit a new record.
Adding to the pressure, new inflation data, specifically the Core PCE, showed an acceleration in July, signaling that rising prices remain a risk despite being in line with expectations. This confluence of factors, including market highs heading into a historically weak September, led to a pullback, with the Nasdaq Composite shedding 1.15%. While the Federal Reserve has hinted at potential rate cuts, the focus on inflation and the jobs market continues to influence investor sentiment.
Comfort Systems is up 64.1% since the beginning of the year, and at $703.08 per share, it is trading close to its 52-week high of $730.01 from August 2025. Investors who bought $1,000 worth of Comfort Systems’s shares 5 years ago would now be looking at an investment worth $13,986.
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