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Market Data Table

Breakfast News: Big Box Stores Face a Reckoning

August 17, 2026

Friday's Markets
S&P 500 7,786 (-0.17%)
Nasdaq 26,729 (-0.28%)
Dow 53,732 (-0.20%)
Bitcoin $62,918 (-0.73)

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1) Big Box Earnings Loom as Consumers Pull Back

Chart comparing the five-year market performance of Walmart, Home Depot, and Target to the S&P 500, with Walmart up 132%, the S&P up 77%, Home Depot up 5%, and Target down 38%.

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U.S. retail and food-services sales fell 0.6% in July, a sharp miss versus economists' forecast for a 0.1% gain. The government doesn't adjust this data for inflation, so the drop reflects real consumer pullback, not just price swings. It follows a rise in June, right after a summer of heavy promotions. The week’s retail earnings parade will put the country's biggest big box stores squarely under the microscope.

The post-promotion hangover: July's slump looks less like a demand collapse than shoppers front-loading purchases during earlier sales events. Now it seems like they're pausing to catch their breath – but we need more data to be sure.
A three-day gauntlet for big box retail: Dividend Investor recommendation Home Depot (NYSE: HD) reports Tuesday, Target (NYSE: TGT) follows on Wednesday, and Walmart (NASDAQ: WMT) closes out the week Thursday. Together, they'll show whether July's dip was a blip or the start of something bigger. A single quarter's beat or miss shouldn't move a five- to 10-year investing thesis on its own.

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2) Markets Defy the Federal Reserve, Again

The S&P 500 and Nasdaq recorded their third straight week of gains. That’s despite Friday's session cooling after disappointing retail sales and consumer sentiment data. The S&P 500 touched a fresh intraday record above 7,800 before ending the week up 0.4%; the Nasdaq added 0.1%. A closely watched Bloomberg Financial Conditions gauge hit its easiest reading since 1996. It’s a sharp reversal from Fed Chair Kevin Warsh's early-August claim that markets had done the central bank's tightening work for it. S&P 500 and Nasdaq futures edged up this morning, close to 0.2% and 0.6%, respectively.

Wall Street Is Undoing the Fed's Work: Since Warsh's July 29 meeting, the S&P 500 has jumped nearly 7%. The Fed's benchmark rate hasn't moved, and long-term Treasury yields have risen. Right now, easing is coming entirely from investor risk appetite, not policy.
Speculation Is Roaring Back: Money is chasing the market's riskiest corners. Cathie Wood's ARK Innovation ETF (NYSEMKT:ARKK) and other high-beta bets are suddenly outperforming, a sign that investors think the Fed will have to do the cooling itself. Treat a rotation into speculative names as a market-mood indicator to watch, not a reason to chase performance.

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3) Nvidia Cuts AI Guarantee in Half

Nvidia (NASDAQ:NVDA), recommended across Motley Fool services, and OpenAI are reworking the financing behind a massive Ohio data center campus. The Wall Street Journal reports Nvidia's initial guarantee of $250 billion is being cut to less than $120 billion. The move follows investors balking at how much balance sheet risk the chipmaker was taking on. The revised plan covers just the first 5 gigawatts of a planned 10-gigawatt build-out. Nvidia will decide later whether to backstop the rest. A deal could be signed within days.

A side bet just as important: Nvidia is separately weighing a $3 billion stake in SB Energy, the SoftBank subsidiary building the site. The two moves don’t mean Nvidia is pulling back on artificial intelligence (AI) investment, just balancing risk and widening its scope.
AI infrastructure isn't just chips and capital: Broadcom (NASDAQ:AVGO) shares fell roughly 6% on Friday. The dip came after reports that hackers were actively exploiting a critical VMware vCenter flaw. Broadcom, recommended by both Team Hidden Gems and Team Rule Breakers, is still up 26% over the past 12 months. A one-day move often doesn’t mean much. Investors should watch for follow-up on the flaw.

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4) Earnings Week Ahead: Clothing, Cruises, and Tractors

TJX (NYSE:TJX), the off-price retailer behind Marshalls and T.J. Maxx, reports its second quarter Wednesday. Analysts expect a revenue rise close to 6% year over year (YOY) to around $15.1 billion, following a strong Q1. TJX has beaten estimates in each of its last four quarters and continues to benefit from strong off-price demand and treasure-hunt shopping appeal. Watch for any updates to full-year guidance.
Viking Holdings (NYSE:VIK), which last appeared in the Rule Breakers rankings list in June, will report Q2 the same day. Momentum has been strong, with Q1 revenue up 17% YOY as 2027 bookings surged 31%. Management had previously flagged some softness in river cruise bookings, though it said demand rebounded after targeted marketing.
Deere & Company (NYSE:DE), a Hidden Gems rec, posts a Q3 update Thursday. Analysts expect revenue to fall around 10% from a year ago to roughly $10.8 billion, as farm-equipment demand stays soft – though there are signs of the trend improving. Dealer inventory levels and full-year margin guidance will likely matter more than the headline drop.

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5) Toast Is Heating Up

Team Rule Breakers

We first recommended Toast (NYSE:TOST) to Rule Breakers members in July 2023 at $22.80 a share, convinced the restaurant-tech platform would become the operating system for hospitality. At today's $34.75, that's up roughly 52%, though still behind the S&P 500. We won't pretend otherwise.

Toast is a far better business now than it was in 2023. We don’t believe the market has fully caught up yet.

Location growth: Toast added a record 9,500 net locations last quarter, pushing its base to approximately 180,000.
Hard to leave: Once a restaurant runs its POS, payments, and payroll on Toast, switching means tearing out the system it runs on.
A bigger market: Toast started as a restaurant specialist. Now it serves grocery stores, bottle shops, convenience stores, and even gas stations.

We're sticking with Toast because it has delivered on its promises. The scalability we counted on in the original recommendation is showing up: Operating margin rose from about 5% to 8% year over year, and annual recurring run rate hit $2.4 billion last quarter. CEO and co-founder Aman Narang told analysts that Toast is on track for "$10 billion in ARR and beyond."

We remain confident this recommendation beats the market over the next five years. Team Rule Breakers’ 5-year price projection for Toast is $56.88.

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6) Your Take

Now that Nvidia is trimming its own risk exposure on AI build-out, does that change how comfortable you are holding it?

Discuss with friends and family, or become a member to hear what your fellow Fools are saying!

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