What Happened?
A number of stocks fell in the afternoon session after a report revealed that U.S. consumer confidence dropped for a second consecutive month, hitting a five-month low amid worries over inflation and the job market.
Market volatility increased as a partisan standoff pushed the federal government closer to a shutdown. If lawmakers fail to reach a spending agreement, a shutdown would begin, furloughing thousands of federal workers. This prospect has weighed on investor sentiment, creating a 'risk-off' mood in the markets as traders brace for potential economic disruption. The political uncertainty adds a layer of caution for investors heading into the final day of the month.
Adding to the weakness, a key report showed U.S. consumer confidence unexpectedly fell to a five-month low in September. The Conference Board's consumer confidence index slid to 94.2, a steeper drop than analysts had anticipated and its lowest reading since April. This downturn reflects growing pessimism among Americans about inflation and a weakening job market. Consumer confidence is a closely watched economic indicator as it gauges households' willingness to spend. A decline suggests that consumers may pull back on discretionary purchases, such as dining out or shopping for non-essential goods, which could negatively impact the future revenues and profits of companies in these sectors.
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:
- Gaming Solutions company Rush Street Interactive (NYSE: RSI) fell 9.4%. Is now the time to buy Rush Street Interactive? Access our full analysis report here, it’s free.
- Toys and Electronics company Funko (NASDAQ: FNKO) fell 5%. Is now the time to buy Funko? Access our full analysis report here, it’s free.
- Apparel and Accessories company Stitch Fix (NASDAQ: SFIX) fell 4.6%. Is now the time to buy Stitch Fix? Access our full analysis report here, it’s free.
- Media company fuboTV (NYSE: FUBO) fell 4.1%. Is now the time to buy fuboTV? Access our full analysis report here, it’s free.
- Casino Operator company MGM Resorts (NYSE: MGM) fell 6%. Is now the time to buy MGM Resorts? Access our full analysis report here, it’s free.
Zooming In On Rush Street Interactive (RSI)
Rush Street Interactive’s shares are very volatile and have had 22 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 28 days ago when the stock dropped 3.5% on the news that the major indices continued to retreat (Nasdaq -1.5%, S&P 500 -1.2%) amid profit-taking and renewed concerns about tariffs.
The downturn was influenced by a court decision that ruled most of President Trump's tariffs illegal, a development that sent a wave of uncertainty through the market. This was compounded by historical data showing September is traditionally the stock market's weakest month. The negative sentiment was significant enough to overshadow positive company-specific news for Rush Street Interactive.
Rush Street Interactive is up 47.9% since the beginning of the year, but at $20.32 per share, it is still trading 9.8% below its 52-week high of $22.53 from September 2025. Investors who bought $1,000 worth of Rush Street Interactive’s shares 5 years ago would now be looking at an investment worth $1,592.
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