S&P 500 Holds Steady: Home Depot Shines, but Trade Concerns Weigh on US Stocks

S&P 500 Holds Steady as Traders Weigh Trade Concerns, Earnings Data

Stocks were mixed Tuesday as the S&P 500 hovered around the flatline, attempting to snap a three-day losing streak. While the Dow Jones Industrial Average rose 155 points (0.4%), the Nasdaq Composite dipped 0.3%. Investors grappled with global trade worries and awaited key economic and earnings data.

Bitcoin also made headlines, dropping below $90,000 to its lowest level in three months—nearly 20% below its all-time high reached on President Donald Trump’s inauguration day.

Can Tech Stocks Rebound After Recent Pressure?

The tech sector remained under pressure, with recent declines dragging the Nasdaq into negative territory for the year. Deepwater Asset Management’s Doug Clinton suggested on CNBC that skepticism over the AI trade may be premature. “The AI trade is still real,” Clinton said. “I don’t think this boom is over. I still think we have two to four years to go.”

Investor sentiment was further impacted by President Trump’s latest trade remarks. Trump indicated that tariffs on imports from Canada and Mexico will proceed after the current 30-day moratorium ends, adding to uncertainty in the markets.

How Did Home Depot’s Earnings Stack Up?

Home Depot’s fourth-quarter earnings slightly topped estimates, sending shares 2% higher. Same-store sales showed strength, up 0.8% versus expectations of a 1.7% decline—the first positive gain in more than two years. However, margin pressures loomed as costs outpaced sales growth, resulting in a narrow earnings beat of just one cent per share.

Looking ahead, Home Depot projected a 3% drop in earnings per share for the fiscal year, significantly undercutting analysts’ expectations for 4.6% growth. The company also announced a modest 2.2% dividend increase, its smallest hike in recent years, signaling potential caution ahead.

What Are Bond Markets Signaling About Economic Growth?

Treasury yields slid as traders sought safety in bonds. The 10-year Treasury yield dropped six basis points to 4.331%, its lowest since December, while the 2-year yield fell to 4.123%. Concerns over economic growth intensified following weak data, including a steep drop in the Philadelphia Federal Reserve’s services index to -12.9 and a decline in consumer sentiment.

Market watchers are now focusing on Friday’s personal consumption expenditures (PCE) index—the Federal Reserve’s preferred inflation gauge—which could influence the central bank’s rate decision at its March 18-19 meeting.

Market Outlook: What’s Next for Traders?

With the S&P 500 searching for direction, traders will closely monitor Nvidia’s earnings report due Wednesday, as well as the U.S. consumer confidence data set for release at 15:00 GMT Tuesday. The PCE index on Friday could also be a pivotal factor, particularly with the Federal Reserve’s rate strategy in the balance.

Expectations for economic growth remain cautious, with any additional trade developments or economic surprises likely to drive volatility in the days ahead.

More Information in our Economic Calendar.