What Happened?
Shares of secondhand luxury marketplace The RealReal (NASDAQ: REAL) fell 3.1% in the afternoon session after the broader market pulled back following a strong rally the previous week. The broader market saw a slight retreat as investors paused to digest recent gains, which were fueled by hopes of an interest rate cut following Federal Reserve Chair Jerome Powell's recent remarks. Major indexes like the S&P 500, Dow Jones, and Nasdaq all opened lower as traders showed caution ahead of upcoming economic reports. Adding to the pressure on retail-related stocks, reports indicated a noticeable weakening in consumer sentiment, exacerbated by uncertainty around tariffs. This shift signals a potential slowdown in consumer spending, which could directly impact companies in the retail sector.
The shares closed the day at $7.26, down 4.5% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy The RealReal? Access our full analysis report here, it’s free.
What Is The Market Telling Us
The RealReal’s shares are extremely volatile and have had 66 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 4 days ago when the stock dropped 6.7% on the news that markets continued to decline, as investors grew cautious ahead of a key speech by Federal Reserve Chair Jerome Powell. The move came as U.S. equity markets recorded a fifth consecutive day of losses for major indexes like the S&P 500, with technology stocks experiencing the largest declines. Investors have grown wary that the sharp rally in the tech sector since April may have advanced too far. The market-wide caution is largely driven by the upcoming Jackson Hole symposium, a meeting of central bankers, where traders are anxiously awaiting Fed Chair Powell's speech on Friday for guidance on the future path of interest rates.
The RealReal is down 26.1% since the beginning of the year, and at $7.27 per share, it is trading 35% below its 52-week high of $11.18 from December 2024. Investors who bought $1,000 worth of The RealReal’s shares 5 years ago would now be looking at an investment worth $416.98.
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