Stock market today: S&P 500, Nasdaq slide as Home Depot leads out retail earnings

US equities experienced a mixed session, with the S&P 500 and Nasdaq Composite sliding, largely driven by losses in the tech sector. Home Depot's Q2 results, despite slightly missing estimates, saw shares jump on a return to consistent US same-store sales growth, signaling a potential thaw in the housing market and setting a precedent for upcoming retail earnings that will gauge consumer resilience amidst tariffs. Concurrently, market participants are keenly focused on Fed Chair Powell's impending Jackson Hole speech for crucial insights into future interest rate policy, given persistent inflation and a faltering job market.

Analysis

The US equity market exhibited a divergent and cautious tone, with the S&P 500 declining 0.6% and the tech-heavy Nasdaq Composite falling over 1.4%, while the Dow Jones remained flat. The weakness was concentrated in the technology sector, evidenced by a nearly 6% drop in Palantir (PLTR) and a more than 4% decline in AMD (AMD). In contrast, the retail sector provided a note of optimism as Home Depot (HD) shares advanced despite slightly missing Q2 earnings estimates. The positive market reaction was driven by a return to consistent same-store sales growth in the US, a key metric signaling a potential stabilization in the housing market. This sets a critical precedent for upcoming results from Target (TGT) and Walmart (WMT), which will be closely watched for insights into consumer health amid tariff pressures. Separately, Intel (INTC) bucked the tech trend, gaining on news of a $2 billion stake from SoftBank, reinforcing its ongoing turnaround efforts. Investor activity remains subdued ahead of Federal Reserve Chair Jerome Powell's pivotal speech at the Jackson Hole symposium, where guidance on future rate policy is anticipated amidst a challenging backdrop of stubborn inflation and a faltering job market.

Key Decisions for Investors

• Monitor upcoming earnings from Target and Walmart closely, as their results will be a crucial barometer for consumer spending and the broader impact of tariffs, following Home Depot's mixed but positively received report.
• Adopt a selective approach to the technology sector, distinguishing between companies facing broad-based selling pressure like Palantir and AMD, and those with specific positive catalysts, such as Intel's new strategic investment.
• Consider maintaining a cautious or hedged stance leading up to the Jackson Hole symposium, as Fed Chair Powell's commentary on inflation and interest rates is likely to introduce significant market volatility.
• For Home Depot, investors should weigh the positive signal of a return to same-store sales growth against the headline earnings miss to assess the sustainability of its recent stock price jump.