Closing Bell: Tech Pressure Persists as Target Earnings Loom

Key Points

• Markets closed mixed as megacap tech weakness dragged the S&P 500 down 0.83% and the Nasdaq-100 down 1.20%, while small caps gained with the Russell 2000 up 0.31%
• Cloudflare (NET) resolved a morning outage affecting services like ChatGPT, X, and AWS, confirmed no malicious activity, issued a patch, and closed down 2.8%.
• Target will kick off retail earnings Wednesday, with analysts expecting $25.32B in revenue and $1.72 adjusted EPS, as the company faces margin pressure from supply chain challenges and tariffs.

Markets ended mixed today as megacap tech stocks continued to face selling pressure. The S&P 500 (SPX) closed down 0.83%, the Nasdaq-100 fell 1.20%, but small caps finished in the green, with the Russell 2000 (RUT) up 0.31%. Energy, Health Care, and Real Estate were the top gaining sectors for the session, while Consumer Discretionary and Information Technology were the biggest decliners.

Cloudflare Outage Disrupts Key Tech Services

Early this morning, Cloudflare (NET) experienced a network outage that impacted several services, including ChatGPT, X, and AWS, among others. The company was able to resolve the issue throughout the day and stated that it has “no evidence the outage was the result of an attack or malicious activity.” A patch was issued to address the matter. Cloudflare closed the day down 2.8%.

Target Set to Kick Off Retail Earnings Tomorrow

On Wednesday morning, Target will report earnings, kicking off the earnings season for retail companies. The company has faced several headwinds over the last several quarters, with margins compressed due to internal struggles in managing its supply chain and external factors such as tariffs. Analysts are expecting revenue of $25.32 billion and adjusted EPS of $1.72.

Home Depot Falls Short on Quarterly Results

Home Depot reported earnings this morning that missed Wall Street’s expectations. The company posted adjusted EPS of $3.74 versus consensus estimates of $3.84. It also lowered its annual adjusted profit forecast, citing uncertainty around consumer behavior, continued pressure in the housing market, and the lack of natural disasters during hurricane season, which traditionally boost sales.

Key Market Events for Tomorrow

• 08:30 AM ET: Trade Balance
• 10:00 AM ET: FOMC Member Miran Speaks
• 10:30 AM ET: Crude Oil Inventories
• 12:45 PM ET: FOMC Member Barkin Speaks
• 02:00 PM ET: FOMC Meeting Minutes
• 02:00 PM ET: FOMC Member Williams Speaks

Notable Earnings for Tomorrow

• Premarket: LOW, TGT, TJX, WSM,
• Postmarket: NVDA, PANW

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