What Happened?
A number of stocks jumped in the afternoon session after WTI crude fell below $70 per barrel, easing pressure on consumer wallets. Wendy's surged 30% (driven largely by retail enthusiasm and a CFO change), while broader quick-service and casual dining stocks like McDonald's and Darden benefited from the macro tailwind.
Oil prices dropped 3%, hitting their lowest levels since early March, acting as a de facto tax cut for middle- and lower-income consumers. The restaurant sector, particularly quick-service, is highly sensitive to gas prices. When it costs less to fill up a car, lower-income consumers have more discretionary income to spend on dining out. This read-through is crucial right now, as restaurants have recently warned of traffic slowdowns due to inflation fatigue. Cheaper energy provides a much-needed catalyst for traffic recovery, though wage inflation remains a risk to restaurant operating margins.
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:
- Traditional Fast Food company Jack in the Box (NASDAQ: JACK) jumped 15.4%. Is now the time to buy Jack in the Box? Access our full analysis report here, it’s free.
- Sit-Down Dining company First Watch (NASDAQ: FWRG) jumped 9.3%. Is now the time to buy First Watch? Access our full analysis report here, it’s free.
Zooming In On Jack in the Box (JACK)
Jack in the Box’s shares are extremely volatile and have had 60 moves greater than 5% over the last year. But moves this big are rare even for Jack in the Box and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 2 days ago when the stock dropped 11.4% after a USDA forecast indicated that rising farm production costs could soon impact ingredient prices.
The U.S. Department of Agriculture's latest forecast projects that total production costs for major crops will continue to rise, potentially reaching record highs. This suggests that restaurant operators may not see relief from elevated expenses in the near future. Key drivers for this increase include significantly higher costs for fuel, lube, electricity, and fertilizer, with some fertilizer cost estimates revised up by as much as 13%. For pizza chains, which rely on agricultural products like wheat, tomatoes, and dairy, these rising input costs could translate directly into higher food expenses, putting pressure on their profit margins.
Jack in the Box is down 28.9% since the beginning of the year, and at $13.32 per share, it is trading 46.5% below its 52-week high of $24.88 from July 2025. Investors who bought $1,000 worth of Jack in the Box’s shares 5 years ago would now be looking at only $110.25.
ONE MORE THING: 3 Hidden Platforms Growing 3X Faster than Amazon, Google, and PayPal. Amazon, Google, and Meta all followed the same playbook: Dominate an ignored market. Build an unbeatable moat. Scale until you’re unstoppable.
These three platforms are running that exact playbook right now. The early investors in Amazon made fortunes. The early investors in these could do the same. Get All 3 Stocks Here for FREE.
