Good Morning Investors!!! Coming off a down day for the Dow of ~$822, this morning’s vibe is “risk check,” with tariffs back in the headlines and the CBOE Volatility Index (VIX) sitting around 21 while the 10-year Treasury yield hovers near 4.03%. Tech is doing a little soul-searching too, as software names struggle on fresh AI fears, and tomorrow’s Nvidia print is the next big gut-check. Add in oil that still has a geopolitical price tag and a softer yen that can shake global money flows, and you have a market that is jumpier than most investors like. Today, keep an eye on the Federal Reserve (Fed) speakers, Consumer Confidence at 10:00 AM ET, and Home Depot’s read on the “DIY” economy.
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Key Market Drivers
Tariffs are back, and volatility woke up: Investors played defense Monday. The S&P 500 fell 1.04%, the Dow dropped 1.66%, and the Nasdaq slid 1.13%. The CBOE Volatility Index (VIX) finished just above 21, while the 10‑year Treasury yield ended near the low‑4% range after falling earlier in the session. The policy catalyst is now live: a temporary 10% import duty took effect at 12:01 a.m. ET, and markets are still sorting out exemptions and whether the rate could be pushed higher (up to 15%). Tariffs can lift prices while cooling growth — a mix that can squeeze margins and complicate the Federal Reserve (Fed – US central bank) rate path. Tonight’s State of the Union (9:00 PM ET) is a clear headline-risk window for any added tariff detail. 
VIX 1 Year Chart, Feb 24, 2026
AI fears hit software, and the ripple reached finance: Software stocks got hit again as investors worried that fast-moving AI tools could compress pricing for legacy modernization and cybersecurity services. International Business Machines (IBM) fell about 13%, and CrowdStrike slid roughly 10% as traders reassessed who is most exposed to “AI‑enabled” competition. At the same time, the spending race is still running hot. One large investment firm estimates Big Tech could pour about $650 billion into AI infrastructure in 2026, up from roughly $410 billion last year. That can favor chips, power, and data‑center suppliers — but it can also mean fewer buybacks and tougher valuation math for software. The next checkpoint is Nvidia’s results on Wednesday, Feb. 25, with the call at 5:00 PM ET. Oil is acting like an inflation wild card again: Oil is hovering near levels that start to matter for the inflation narrative. West Texas Intermediate (WTI – US crude benchmark) was around $66.4 a barrel early Tuesday, after settling near $66.3 on Monday, and Brent held near the low‑$71s. The driver is geopolitics, with US–Iran tensions keeping a “risk premium” in crude ahead of nuclear talks Thursday in Geneva. Higher oil tends to show up in gasoline and shipping costs, which can lift inflation and pinch consumer budgets. Watch Wednesday’s Energy Information Administration (EIA) inventory report at 10:30 AM ET for any surprise moves in US stockpiles. The yen slid, and currency markets stayed jumpy: Currencies caught traders attention overnight. The Japanese yen weakened about 0.8% to roughly 156 per dollar in early Asian trading after a report raised questions about how aggressively Japan can keep hiking rates. Japanese bond yields dipped as traders trimmed expectations for near‑term tightening. For US investors, big FX swings can change the translated value of overseas revenue and can unwind carry trades (borrow in a low‑rate currency, invest in a higher‑rate one, the spread is profit), sometimes spilling into stocks and bonds. The next check: whether USD/JPY holds above 156, and whether officials try to slow the move with comments — especially with tariff headlines still driving the tape. |
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US Homebuilders
Homebuilders build and sell new houses and their neighborhoods. They matter because housing drives jobs and spending, from tradespeople to appliances. When builders sneeze, the economy reaches for a tissue.
The driver right now is mortgage rates, flirting with 6%. That is why the SPDR S&P Homebuilders ETF (XHB) fell about 3% over the last five trading sessions through Monday’s close. Builders can use incentives, like covering closing costs or lowering a buyer’s rate, to keep deals moving.
D.R. Horton (DHI):
D.R. Horton is the biggest US homebuilder by volume, focused on entry-level and move-up homes. Scale helps it keep building when buyers get picky. In its latest quarter, net sales orders rose 3% and the cancellation rate was 18%.
Toll Brothers (TOL):
Toll builds higher-end homes, so buyers often have more equity and less “payment shock.” That can make demand steadier when rates bounce. In its latest quarter, profit per share was $2.19 and the average delivered price was about $977,000.
PulteGroup (PHM):
Pulte builds homes across several brands, including Centex for first-time buyers and Del Webb for 55+ communities. That mix helps it sell to different buyer groups without forcing one blueprint on everyone. In results reported Jan 29, net new orders (new contracts minus cancellations) rose 4% to 6,428 homes. Home sale gross margin slipped to 24.7% after land write-downs, which is what can happen when incentives creep up or land gets pricier.
Sekisui House (1928.T):
Sekisui House is a Japan-based builder growing its US presence via acquisitions. It aims to stand out with industrialized building methods and energy-efficient designs. It is reorganizing its US units into one structure in 2026, a scale play with integration risk.
InvestorsGrow Takeaway:
Keep one eye on the 10-year Treasury yield because mortgage rates often follow, and higher payments cool demand. Wall Street watches net new orders and cancellations to see if buyers are committing or bailing. Red flag: incentives up while unsold completed inventory builds, which often signals pricing pressure. Watchlist: if the 10-year yield drops and cancellations stay low, expect the group to perk up.
Home Depot (HD)
Home Depot sells home-improvement supplies to homeowners and contractors, from lumber to lightbulbs. It’s a giant store that sells everything your home could use: come in for a screw, leave with a ladder and a shrub.
In the last 24 hours, Home Depot posted quarterly sales of $38.2 billion, with adjusted profit per share of $2.72, and it bumped its quarterly dividend 1.3% to $2.33. The stock rose about 3.5% in premarket trading, after closing Monday at $376.99.
Home Depot is down about 4% over the past 1 year and up about 62% over the past 5 years. That tells you the market still trusts the business, but it has not been paying up for fast growth.
Home Depot
The backdrop is mostly “housing math.” When mortgage rates are high, fewer people move and big remodels get delayed, which cools demand. Smaller repairs still happen, and contractors have been the steadier customer versus weekend shoppers. The closest rival is Lowe’s (LOW), and Lowe’s has outpaced Home Depot over the past five years (about +85% vs +64% including dividends), a sign investors have preferred Lowe’s momentum.
The year-ahead number that matters is Home Depot’s comparable sales outlook of flat to +2%. It’s a clean gut-check on whether spending is actually improving, not just bouncing around quarter to quarter.
Next up, watch spring-season traffic, big-ticket categories like kitchens and flooring, and promo intensity across the industry. If comparable sales keep trending up, then earnings pressure eases; if not, the “wait for housing” storyline sticks.
InvestorsGrow Takeaway:
Home Depot is fine, the housing market is the headache. If rates ease and home turnover returns, bigger projects can come back quickly, and steady contractors keep the floor from falling out. If homeowners keep patching instead of upgrading, and if promotions heat up, then growth can stay stubbornly slow even with decent execution.
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