What Happened?
A number of stocks fell in the afternoon session after the release of a much weaker-than-expected U.S. jobs report, which overshadowed hopes for a Federal Reserve interest rate cut by fueling concerns about the health of the economy.
The U.S. Bureau of Labor Statistics reported that employers added only 22,000 jobs in August, significantly below the 75,000 economists had forecasted. Additionally, the unemployment rate rose to 4.3%, its highest level since 2021. While poor economic data often increases the likelihood of the Federal Reserve cutting its benchmark interest rate to stimulate growth, the sharp slowdown in the labor market appears to have spooked investors.
The concern is that the weak hiring is a sign of a more pronounced economic downturn, which could negatively impact corporate profits. This fear has led to a "flight to safety," with investors selling stocks and buying government bonds, pushing Treasury yields to their lowest levels in months.
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:
- Project Management Software company Asana (NYSE: ASAN) fell 8.2%. Is now the time to buy Asana? Access our full analysis report here, it’s free.
- Advertising Software company AppLovin (NASDAQ: APP) fell 2.7%. Is now the time to buy AppLovin? Access our full analysis report here, it’s free.
Zooming In On Asana (ASAN)
Asana’s shares are extremely volatile and have had 36 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 1 day ago when the stock gained 1.9% on the news that the company reported better-than-expected second-quarter 2025 financial results and raised its full-year guidance.
The company announced quarterly revenue of $196.9 million, a nearly 10% year-over-year increase that surpassed analyst estimates of approximately $193 million. The work management platform provider also reported a significant improvement in profitability, posting non-GAAP earnings of six cents per share, which beat expectations of five cents. This marks a notable turnaround from the loss recorded in the same period last year. The company's operating margin also showed substantial year-over-year improvement.
Looking ahead, Asana raised its full-year guidance for both revenue and adjusted earnings per share, signaling confidence in its continued growth and path to profitability.
Asana is down 32.2% since the beginning of the year, and at $13.47 per share, it is trading 51.1% below its 52-week high of $27.52 from December 2024. Investors who bought $1,000 worth of Asana’s shares at the IPO in September 2020 would now be looking at an investment worth $467.53.
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