New York, August 21, 2025 — Wall Street was rattled on August 20 as investors digested a sharp downturn in technology stocks and mixed results from several major U.S. retailers, underscoring growing unease in financial markets. The tech-heavy Nasdaq Composite fell by roughly 1.5%, weighed down by heavy selling in artificial intelligence-linked companies and other high-growth names. The broader S&P 500 also declined, slipping 0.6%, while the Dow Jones Industrial Average managed to hold on to modest gains after touching an intraday high.
Analysts attributed much of the volatility to concerns that the technology sector, which has fueled much of the market’s gains over the past year, is showing signs of overheating. In particular, valuations tied to AI development have drawn increasing scrutiny as investors reassess whether near-term earnings can justify soaring stock prices. The pullback was seen as part of a broader repositioning by traders ahead of a critical stretch of corporate earnings reports and an upcoming Federal Reserve policy symposium.
Against this uncertain backdrop, one of the day’s standout stories came from Lowe’s Companies Inc., which defied the market trend with strong earnings results and strategic expansion plans. The home-improvement retailer’s stock rose more than 3% in pre-market trading after the company announced quarterly results that beat Wall Street expectations. Lowe’s also confirmed its $8.8 billion acquisition of Foundation Building Materials, a major distributor serving more than 40,000 professional customers across North America. The deal, one of the largest in the company’s history, is designed to strengthen Lowe’s presence in the professional builder segment and broaden its supply chain capabilities.
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In addition to the acquisition, Lowe’s raised its full-year sales outlook, projecting revenues of $84.5 to $85.5 billion compared with its prior forecast of $83.5 to $84.5 billion. The move was widely interpreted as a vote of confidence in the company’s integration plans and overall market strategy. The retailer reported adjusted earnings per share of $4.33 for the second quarter, up 5.6% from the year prior, with net earnings climbing to $2.4 billion. Comparable sales, a closely watched measure of retail health, increased 1.1%, marking the first time since late 2024 that Lowe’s outpaced Home Depot in comparable sales growth. The results highlighted Lowe’s ability to find growth even in a challenging consumer environment, with its expansion into professional services creating new avenues of revenue.
Not all retail news was as encouraging. Target Corporation saw its shares tumble nearly 10% after announcing a pending leadership change. The company revealed that longtime Chief Executive Brian Cornell will step down on February 1, 2026, transitioning to the role of executive chair of the board. Michael Fiddelke, currently the company’s chief operating officer and a 20-year veteran of the firm, will assume the role of CEO. While Fiddelke brings broad experience across finance, merchandising, operations, and human resources, investors expressed skepticism that an insider appointment would deliver the fresh vision needed to reverse Target’s recent struggles.
Target has been grappling with weak sales and declining foot traffic, with its most recent quarterly earnings showing adjusted earnings per share of $2.05 in line with expectations but highlighting ongoing declines in comparable-store performance. Beyond its financial results, Target has also been facing reputational headwinds. The company’s decision earlier this year to scale back diversity and inclusion initiatives drew criticism from both customers and members of the founding Dayton family, raising questions about its broader brand identity. The leadership change, coming amid these challenges, has left investors uncertain about whether the retailer can regain momentum in an increasingly competitive retail landscape.
The retail sector’s struggles extended beyond Target. Shares of La-Z-Boy, the furniture manufacturer and retailer, plummeted nearly 25% after the company reported weak earnings results and issued a downbeat revenue forecast. The sharp sell-off underscored the difficulties facing discretionary consumer goods companies, which continue to wrestle with a combination of higher interest rates, slowing consumer demand, and shifting spending priorities.
Beyond corporate earnings, investors were also focused on signals from the Federal Reserve. Minutes from the Fed’s July meeting released this week showed that only two dissenting members favored a rate cut, while the majority preferred to hold the current benchmark rate steady. Policymakers expressed concern that inflationary pressures remained elevated despite signs of cooling in the labor market, suggesting that the central bank was not yet ready to loosen monetary policy.
Attention now turns to the Federal Reserve’s annual Jackson Hole Economic Policy Symposium, scheduled to conclude at the end of the week. Fed Chair Jerome Powell is expected to deliver a closely watched address that could provide critical insight into the central bank’s next moves. Markets are speculating about the possibility of a rate cut in September, with some analysts predicting a modest reduction of 25 basis points. However, Powell is widely expected to emphasize the Fed’s commitment to stabilizing inflation, signaling that any easing of policy will be measured and data-dependent.
The combination of a technology sell-off, mixed retail earnings, and lingering uncertainty over Federal Reserve policy created a volatile environment for investors on August 20. While Lowe’s provided a rare note of optimism with strong results and a confident outlook, the struggles of Target and La-Z-Boy highlighted the broader challenges facing U.S. retailers in 2025. With technology valuations under pressure and the Fed preparing to clarify its next steps, markets are bracing for continued turbulence as the summer draws to a close.
