US earnings this week will focus mainly on the retail sector, featuring major companies like Walmart, Target, and Home Depot. Investors will closely watch both the earnings results and the guidance, especially regarding tariffs and rising costs. A key question is whether retailers will pass these cost increases on to consumers. The recent rise in the Producer Price Index (PPI) may raise concerns about third-quarter forecasts. Home Depot, which represents nearly 8% of the Dow, is particularly significant among this week’s earnings reports.

Detailed Earnings Calendar

For details on expected earnings from August 18-22, 2025, a calendar is available. This serves as a helpful guide for tracking these important dates. With major retail earnings due this week, we’re focusing more on future guidance than just the results. Recently, July retail sales figures were lower than expected, indicating a slowdown in consumer spending. This makes Walmart and Target’s outlook crucial for understanding the overall economy. The big question is whether companies are absorbing higher costs or passing them on to customers. Last week’s PPI rose by 0.3% month-over-month, confirming that inflationary pressures at the wholesale level persist. If guidance indicates that profit margins are tightening, we might see a quick decline in stock value. In that case, protective put options on these stocks or related ETFs could become appealing. With such uncertainty, implied volatility for these retail stocks is increasing ahead of their earnings announcements. Meanwhile, the CBOE Volatility Index (VIX) for the broader market remains around 14, suggesting that options are relatively cheap for hedging or speculative strategies. This could lead to a “volatility crush” after the earnings are released, which traders using long straddles should keep in mind.

Impact on Dow Jones Industrial Average

We must also consider the broader indices, particularly the Dow Jones Industrial Average. Home Depot, making up nearly 8% of this price-weighted index, could significantly influence its direction after earnings. Traders might look into options on the DIA exchange-traded fund to engage with this event while avoiding single-stock risks. We can reflect on consumer behavior changes in 2022 and 2023 for insight. During that period, consumers quickly shifted from discretionary purchases to essentials as inflation impacted household budgets. Any hints of a similar trend now would signal bearish implications for sectors beyond retail. Create your live VT Markets account and start trading now.

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