Tuesday’s big stock stories: What’s likely to move the market in the next trading session

Tuesday's market attention centers on key earnings reports from Home Depot and Amer Sports pre-bell, and Toll Brothers post-bell, alongside critical housing starts and building permits data, offering insights into consumer and housing sector health. While homebuilders have posted significant recent gains, many remain off their 52-week highs. In the tech sector, Salesforce is down nearly 30% year-to-date due to AI democratization concerns despite strong analyst price targets, contrasting with Alphabet's robust long-term performance and sustained analyst confidence on its 21st IPO anniversary.

Analysis

The market is positioned for a pivotal session focused on consumer and housing sector health, with upcoming earnings from Home Depot (HD) and Toll Brothers (TOL) coinciding with the release of housing starts and building permit data. Homebuilders have demonstrated significant recent strength, with TOL gaining 22% and Hovnanian surging 37% over the past three months, though they remain 22% and 30% below their respective 52-week highs, indicating a sector in recovery but not yet at peak valuation. In technology, a stark divergence is evident between Salesforce (CRM) and Alphabet (GOOGL). Salesforce is under considerable pressure, with its stock down nearly 30% year-to-date amid concerns that AI democratization may threaten its business model. This market pessimism contrasts sharply with a bullish analyst consensus, where 48 of 58 analysts rate it a buy, and the average price target of $346.35 suggests substantial upside from its current $243.97 level. Conversely, Alphabet continues to display long-term strength and enjoys robust analyst confidence on its 21st IPO anniversary, with 57 analysts rating it a buy and an average price target of $220 implying steady, continued growth.

Key Decisions for Investors

• Investors should closely monitor the Toll Brothers earnings report and the national housing starts data, as these will be critical in validating the recent strong performance of homebuilding stocks like TOL, LEN, and HOV.
• The significant disconnect between Salesforce's (CRM) sharp stock decline and its strong analyst price targets presents a potential value opportunity, but conviction requires scrutinizing its AI summit for evidence that it can secure new government contracts and defy market concerns.
• Given Amer Sports' 20% surge in the last three months, its upcoming earnings report carries high expectations, and any failure to meet them could trigger a significant correction.
• While Alphabet (GOOGL) remains a favored holding among analysts, its price target suggests moderate upside, positioning it more as a stable long-term holding than a catalyst for aggressive short-term gains.