What Happened?

A number of stocks jumped in the afternoon session after the Supreme Court struck down sweeping Trump tariffs, bringing potential relief to companies impacted by international trade disputes. 

The ruling was seen as a significant win for sectors reliant on global supply chains, as tariffs, which are essentially taxes on imported goods, have increased operating costs and squeezed profit margins for many U.S. companies. The removal of these levies is expected to lower expenses for manufacturers and retailers, potentially leading to more competitive pricing and stronger earnings. This positive development appeared to outweigh earlier concerns in the session regarding reports of slowing economic growth and rising inflation, with the broader market, including the S&P 500, ticking higher on the news. In response to the ruling, the Trump administration announced plans to impose a new 10% global tariff.

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:

• Consumer Discretionary - Real Estate Services company Opendoor (NASDAQ: OPEN) jumped 3.3%. Is now the time to buy Opendoor? Access our full analysis report here, it’s free.
• Consumer Discretionary - Leisure Facilities company Live Nation (NYSE: LYV) jumped 4.8%. Is now the time to buy Live Nation? Access our full analysis report here, it’s free.
• Consumer Discretionary - Toys and Electronics company Funko (NASDAQ: FNKO) jumped 22.2%. Is now the time to buy Funko? Access our full analysis report here, it’s free.
• Consumer Discretionary - Apparel and Accessories company Stitch Fix (NASDAQ: SFIX) jumped 2.8%. Is now the time to buy Stitch Fix? Access our full analysis report here, it’s free.
• Consumer Discretionary - Footwear company Genesco (NYSE: GCO) jumped 3.9%. Is now the time to buy Genesco? Access our full analysis report here, it’s free.

Zooming In On Funko (FNKO)

Funko’s shares are extremely volatile and have had 66 moves greater than 5% over the last year. But moves this big are rare even for Funko and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 7 months ago when the stock dropped 31.4% on the news that the company reported second-quarter 2025 results that saw key profitability metrics fall short of Wall Street's expectations. 

While the company's revenue of $193.5 million came in ahead of analysts' forecasts, it still represented a steep 21.9% decline compared to the same quarter last year. The main cause for investor concern was on the bottom line, where Funko's adjusted loss per share of $0.48 missed consensus estimates. The company also reported a significant adjusted EBITDA loss of $16.53 million and burned through $22.18 million in free cash flow. This performance was driven by a sharp deterioration in profitability, with the operating margin plunging to negative 18% from a positive 4.3% a year ago, highlighting the company's ongoing operational challenges.

Funko is up 55.8% since the beginning of the year, but at $5.24 per share, it is still trading 62.4% below its 52-week high of $13.92 from February 2025. Investors who bought $1,000 worth of Funko’s shares 5 years ago would now be looking at an investment worth $407.71.

The 1999 book Gorilla Game predicted Microsoft and Apple would dominate tech before it happened. Its thesis? Identify the platform winners early. Today, enterprise software companies embedding generative AI are becoming the new gorillas. Click here for access to our special report that reveals one profitable leader already riding this wave, it’s free.