Editor
American stocks wavered on Tuesday as a fresh wave of retail earnings reports kicked off, with investors searching for clues on everything from the health of the U.S. consumer to the potential for a fresh round of interest rate cuts. All eyes were on a modest rebound for one of the sector’s giants, but the broader market struggled to find its footing.
Markets Look for Direction as Earnings Trickle In
The Dow Jones Industrial Average hovered just below the flat line, but the S&P 500 slipped about 0.6%. Meanwhile, the tech-heavy Nasdaq Composite felt the most pain, declining more than 1.4% as a handful of high-profile tech names took a beating. Chipmaker AMD and data analytics firm Palantir were among the worst performers, falling more than 4% and 6% respectively.
The day’s marquee event was Home Depot’s quarterly report, which kicked off the string of retail earnings expected this week. The home improvement giant missed Wall Street’s second-quarter earnings estimates, but its stock jumped in morning trading. The reason? The company’s report showed a return to consistent same-store sales growth in the U.S. for the first time in months. For some, it was a subtle signal that the long, cold slump in the U.S. housing market might finally be starting to thaw.
“It’s a nuanced picture,” said Melissa Chen, a retail analyst at Northwood Capital. “Home Depot’s strength is a good sign for consumer confidence in the housing sector, but it’s not a green light for the entire economy. We need to see what comes next from Target and Walmart to get a clearer picture.”
Geopolitics and the Fed Loom Large
The week’s action isn’t just about corporate balance sheets. It’s also about what’s happening in Washington and Wyoming.
The tech sector, despite its slide, saw one notable bright spot. Intel’s stock got a jolt after Japanese conglomerate SoftBank announced it would take a $2 billion stake in the chipmaker. The news came on the heels of a separate Bloomberg report that the Trump administration was also considering a 10% stake in the struggling tech giant. These moves underscore the strategic importance of U.S. chip manufacturing—and the lengths to which a company’s survival can become a matter of national security.
In the broader markets, investors are on high alert for Friday’s speech by Federal Reserve Chair Jerome Powell at the annual Jackson Hole symposium. Powell’s remarks—potentially his last as Fed chair—are widely expected to offer clues on the central bank’s next move on interest rates.
“The Fed is walking a tightrope right now,” said David Hayes, a senior economist at the Institute for Global Economics. “Inflation remains stubborn, but the job market is showing some signs of a slowdown. They need to signal how they’ll balance those two competing forces without shocking the market. It’s a delicate dance, to say the least.”
Meanwhile, geopolitical tensions continued to simmer, with reports emerging that President Trump asked Russian President Vladimir Putin to meet with Ukrainian President Volodymyr Zelensky. European leaders rallied around Zelensky during a meeting with Trump, but the markets were hesitant, as uncertainty over Ukraine’s fate hung in the air. The delicate geopolitical backdrop, it seems, is a constant weight on investor sentiment.
Looking Ahead
With the markets searching for direction, the coming days will be critical. The next round of retail earnings from Target and Walmart, combined with Powell’s high-stakes speech, will likely dictate whether this week’s muted start gives way to a decisive move—up or down.
What do you think will be the most significant factor affecting the market this week: the Fed’s next move or the upcoming retail earnings reports?
