What Happened?

A number of stocks fell in the morning session after crude oil prices surged toward $120 a barrel amid escalating geopolitical conflict in the Middle East. 

The spike in crude prices follows an intensification of the Iran war, stoking fears of production and shipping disruptions. These concerns rattled global markets. For the consumer discretionary sector, which includes companies that sell non-essential goods and services, the impact is significant. Higher oil prices can lead to a new wave of inflation, squeezing household budgets and reducing the disposable income available for discretionary spending. This threatens to soften consumer demand, creating headwinds for the sector.

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:

• Home Furniture Retailer company Arhaus (NASDAQ: ARHS) fell 6.3%. Is now the time to buy Arhaus? Access our full analysis report here, it’s free.
• Specialty Retail company National Vision (NASDAQ: EYE) fell 6%. Is now the time to buy National Vision? Access our full analysis report here, it’s free.

Zooming In On Arhaus (ARHS)

Arhaus’s shares are extremely volatile and have had 34 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 11 days ago when the stock gained 10.3% on the news that the company reported fourth-quarter 2025 results that beat Wall Street's expectations for revenue and profit. 

For the quarter, revenue grew 5.1% year on year to $364.8 million, beating analysts' expectations. The company's profit was also a bright spot, with GAAP earnings per share of $0.11 coming in 15.8% above consensus estimates. This strong performance appeared to outweigh some of the report's weaker points, such as a 2.8% decline in same-store sales and a drop in operating margin from 8.2% to 5.6% year on year. 

Additionally, the company's revenue guidance for the first quarter of 2026 came in below expectations. However, the beat on both the top and bottom lines for the reported quarter, along with a better-than-expected EBITDA forecast for the full year 2026, provided investors with enough positive news to send the stock higher.

Arhaus is down 37.5% since the beginning of the year, and at $7.11 per share, it is trading 44.5% below its 52-week high of $12.80 from August 2025. Investors who bought $1,000 worth of Arhaus’s shares at the IPO in November 2021 would now be looking at an investment worth $555.08.

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