Market Slides on Home Depot Miss and Crypto Plunge, Volatility Surges Ahead of Nvidia

U.S. equities opened sharply lower Tuesday morning, extending a risk-off mood across global assets as cautious investor sentiment was reinforced by a disappointing earnings report from Home Depot Inc. and a continued rout in the cryptocurrency market. At the Opening Bell, the Dow Jones Industrial Average dropped 482 points, or 1.04%, trading near 46,108, while the broad-market S&P 500 fell 0.54% to 6,637. The technology-heavy Nasdaq Composite slipped 0.59% to 24,653. The surge in volatility underscored the market's unease, with the VIX—the market's "fear gauge" spiking more than 6.4% to 23.82. The pressure came as Bitcoin plunged more than 2.7% to trade near $91,294, highlighting fatigue in speculative assets, even as commodity prices showed modest losses, with Gold down 0.19% to $4,067 and Crude Oil down 0.15% to $59.77 a barrel.

Home Depot Misses as Housing Lags

The most significant pre-market trading news centered on Home Depot Inc., whose shares were trading lower by roughly 2% after the company delivered its third consecutive earnings miss, according to the provided report. The home-improvement retailer's third-quarter results showed weak comparable sales, traffic, and profitability despite modest revenue growth.

The company's core operating metrics fell short of expectations, with comparable sales rising a meager 0.2% against consensus estimates of +1.3%. This performance reinforces the narrative that consumers remain hesitant to commit to large projects due to elevated interest rates, soft housing turnover, and macroeconomic uncertainty. CEO Ted Decker noted that “an expected increase in demand...did not materialize,” reflecting the sustained "deferral mindset" among homeowners since mid-2023.

Further compounding the pressure, management lowered its fiscal 2025 guidance, now expecting adjusted diluted earnings per share (EPS) to decline about 5% year-over-year, which is steeper than its previous guidance of a 2% decline. The report highlighted that the stock is now testing the critical $341 support level—the 200-week moving average—amid its prolonged underperformance relative to the broader retail sector.

Bitcoin Signals Broader Risk-Off Sentiment

Adding to the cautious mood is a sharp sell-off in Bitcoin (BTC), which often reflects the broader appetite for risk. After reaching record highs in October, the cryptocurrency is now down about 28% from its peak and has turned negative year-to-date, according to a market report.

📺 The Math That Could Predict Bitcoin's Peak & Bottom 👇

Its weakness is "contributing to fatigue in broader risk assets as aggressive traders unwind positions and adopt a more cautious stance." The Relative Strength Index (RSI) for BTC recently plummeted to 19, a level not seen since February 25. While a low RSI can sometimes support a short-term bounce, it is also noted as a warning sign that "more downside could follow." The report suggests that until the market experiences a "sharper flush that reopens liquidity and sets up a more attractive entry," there is "no urgency to go all-in."

High Stakes for Nvidia’s AI Referendum

Looking ahead, market participants are fixated on Nvidia’s third-quarter fiscal 2026 earnings report, scheduled for release after the close on Wednesday. The report is being framed as the "single most important data point" for the market in the final weeks of the year and a "referendum on the durability of the entire AI trade."

Wall Street is looking for roughly $54.8-55 billion in revenue and $1.25 in EPS, representing more than 50% year-on-year growth. The key swing factor will be January quarter guidance, with consensus sitting near $61-62 billion. CEO Jensen Huang has previously disclosed over $500 billion in cumulative orders for the new Blackwell and next-generation Rubin platforms through 2026, underlining significant long-term momentum.

However, the setup is binary: an upside surprise, with guidance north of $62 billion, could re-ignite momentum in the entire AI complex. Conversely, a miss, a conservative guide, or any suggestion that supply constraints or geopolitical risks, such as the zero-sales assumption for China data center revenue, are biting harder, could validate “AI-bubble worries” and invite a deeper rotation out of growth stocks. This sentiment is amplified by recent profit-taking from sophisticated investors, such as Peter Thiel's Thiel Macro fund and SoftBank.

As the market seeks direction, the underlying message remains one of caution until a more straightforward path emerges. In the words of Warren Buffett: "Be fearful when others are greedy, and be greedy when others are fearful."