First Watch Slumps 5.76% as Macroeconomic Pressures and Sector-Wide Profit-Taking Drive Pre-Market Selloff

First Watch slumped 5.76% in pre-market trading on Dec. 22, 2025, reflecting a pronounced shift in market positioning ahead of the open. The decline marked one of the most abrupt intraday moves in its recent performance history.

Analysts attributed the selloff to broader macroeconomic pressures and sector-wide profit-taking, with no immediate corporate-specific triggers identified. The drop aligned with heightened volatility driven by evolving interest rate dynamics, amplifying uncertainties in the retail space. Algorithmic trading activity and passive fund rebalancing were cited as potential accelerants, though institutional positioning remains neutral.

Market focus has shifted to key technical levels and near-term fundamentals as traders assess the move's implications. With no earnings or strategic updates reported in the prior week, the correction appears tied to macro-driven risk-off sentiment rather than fundamental deterioration. Derivatives activity shows limited directional bias, suggesting a wait-and-see approach among major participants.

Upcoming macroeconomic data releases and the company's earnings report will serve as critical inflection points. Technical indicators highlight critical support thresholds that could determine whether this selloff consolidates into a larger bearish trend or stabilizes into a short-term pullback.