Home Depot’s actions lead the profits in the Dow Jones index after Powell’s ‘transitory’ optimism

• The Home Depot shares lead the Dow profits on Thursday, with an increase of more than 2%.
• The Dow Jones sees a second session after the recent weakness of the market.
• The president of the FED, Powell, described the inflation based on “transient” tariffs on Wednesday.
• 25% tariffs on Canada and Mexico are scheduled to start on April 2.

The home depot shares (HD) They are leading the industrial average Dow Jones (DJia) up on Thursday, after what most on Wall Street consider positive signals of the press conference of the President of the Federal Reserve (Fed), Jerome Powell, Wednesday afternoon.

The DJ and the other main stock market indices of the US have advanced between a quarter and half a percentage point at the time of writing.

As expected, the FEDE Mercado Federal Committee (FOMC) of the Fed maintained the stable interest rates on Wednesday, but the market focused on Powell’s optimism regarding inflation.

“It can sometimes be appropriate to ignore inflation, if you will disappear quickly without action on our part,” is transitory, “and that may be the case of tariff inflation,” Powell said Wednesday. “I think that would depend on tariff inflation to move quickly and depend critically that long -term inflation expectations are quite well anchored.”

Investors know that Powell referred to the preliminary reading of the expectations of inflation to the consumer 5 years from the University of Michigan last Friday, which saw the January expectation of 3.2% increase to 3.9% in March. In other words, Powell is not convinced that the increase in inflation expectations is sufficient to stop the Fed to lower the rates later this year, and in fact, the Federal Reserve points chart demonstrates that the FOMC still hopes to cut the rates at 50 basic points by the end of the year.

The Fed still degraded the economic growth of the US this year, but its members still want to see more data before allowing concern to be installed. The former president of the Fed in New York, Bill Dudley, told Bloomberg that he saw the points graph as aggressive, but Powell’s speech as moderate.

News about The Home Depot Actions

The Home Depot has been able to stabilize the price of its shares this week after having lost more than 11% in the previous two weeks. The main concern for shareholders has been how Trump’s administration tariffs will affect the retirement of the home improvements.

The company obtains many products from Canada, Mexico and China, all of which face current or coming tariffs of the administration. Trump has already delayed them twice, but the president says that 25% tariffs will take effect in Canada and Mexico on April 2. Trump added another 10% tariff to China’s products, carrying the minimum tariff in that country at 20%.

A large segment of wood sold by The Home Depot is currently obtained from Canada, and wood represented almost 8% of the retailer’s income in 2023. The floors, which represented almost 6% of the income, are also largely based on wood. By adding construction products and milling work, segments that have a lower dependence on wood, the company affected by the company would amount to just over a quarter of the income.

Chinese appliances are another important segment that should see impacts, but the replacement of southern Korea appliances or US could avoid the need to increase prices. However, The Washington Post reported this week that the White House is preparing new broad tariffs on all commercial partners, so South Korea may not be safe.

The perspective of tariffs comes at a time when The Home Depot is preparing for its annual Black Friday of Spring, which usually occurs during April. The event is important for the second quarter of The Home Depot and typically offers discounts on gardening supplies, exterior furniture and lawn care.

The Home Depot Shares Prognosis

Home Depot shares have found their stability this week at $ 340, but only time will say if this is a dead cat rebound. HD shares are quoting well below their simple mobile (SMA) average (SMA), which should make most anxious buyers stop.

HD shares need to exceed the level of $ 384 to contain the recent fall. However, that is unlikely to happen unless the US Administration discards its current pro-aroncary career.

The most likely result that HD will need to descend to the level of $ 340, which remained on August 13, 2024, or at the level of May 324 last year. The convergence/divergence of mobile socks (MACD) remains at a bassist crossing that entered in early February, and the bullies will wait until a clear and dramatic bullish crossing is achieved.

HD Shares Daily Chart