Caution Returned to Wall Street Amid AI Infrastructure Spending Growth Worry and Cloudy Outlook for Retailers

Barry Adams
22 Aug, 2025
New York City

Wall Street indexes struggled to advance on Friday, and investors reviewed the fresh batch of mixed earnings. 

The S&P 500 index edged up 0.2%, and the tech-heavy Nasdaq Composite inched higher 0.1%, amid worries about the tariff-driven hit on corporate earnings. 

For the week, the S&P 500 index is set to close down more than 2%, and the Nasdaq Composite is likely to ease around 1.4%.

Ross Stores reported mixed quarterly results and confirmed that the U.S. import duties are expected to lower its annual earnings per share by 5% from a year ago. 

Earlier in the week, Walmart, Target, Home Depot, Lowe's, T.J. Maxx, and other leading companies indicated that the sharp jump in import duties is increasing the cost of goods.

Retailers have been able to avoid a sharp increase in prices because tariffs have been rolled out at a slower than expected pace, and large retailers stocked up on goods that could last for several months. 

However, smaller and independent retailers have struggled to adjust to higher import duties amid capital constraints and lack of a diversified supply base. 

For now, large retailers are absorbing higher import costs, but as tariffs increase on a wider range of products beginning this month, consumers are likely to see higher prices in the months ahead. 

Fed Chair Jerome Powell is set to deliver his comments about the state of the U.S. economy at the annual symposium held in Jackson Hole, Wyoming. 

Investors are looking for clues about rate paths, labor market conditions, and the possible longer-term impact of high import duties. 

 

U.S. Stock Movers 

Intuit Inc. declined 6.3% to $655.0, despite the company delivering better-than-expected results in its latest fiscal quarter. 

Consolidated revenue inched higher to $3.8 billion from $3.2 billion, net income swung to a profit of $381 million from a loss of $20 million, and diluted income per share swung to a profit of $1.35 from a loss of 7 cents a year ago.

The company's outlook for the current quarter fell short of investor expectations. 

Intuit provided GAAP guidance for the fiscal first-quarter revenue to be between $3.74 billion and $3.78 billion, operating income between $440 million and $460 million, and diluted earnings per share between $1.19 and $1.26.

Zoom Communications rose 4% to $76.10, and the video platform operator reported higher sales driven by a surge in demand from its enterprise customers. 

Consolidated revenue in the second quarter ending in July edged higher to $1.22 billion from $1.16 billion, net income advanced to $471.3 million from $436.4 million, and diluted earnings per share rose to $1.16 from 70 cents a year ago.

Workday Inc. declined 4.5% to $217.13 after the company's forward-looking guidance disappointed investors. 

Total revenue in the fiscal second quarter ending in July rose 12.6% to $2.4 billion, net income rose to $228 million from $132 million, and diluted earnings per share advanced to 84 cents from 49 cents a year ago. 

The human resource software company guided fiscal third quarter revenue to increase 14% to $2.24 billion and adjusted operating margin to 28%, matching expectations laid by some analysts.

In addition, the company revised its full-year revenue outlook to $8.8 billion and adjusted operating margin of 29%. 

Ross Stores advanced 3% to $145.62, despite the deep discount merchandiser reporting mixed results in the second quarter ending on August 2.

Revenue in the quarter increased to $5.5 billion from $5.3 billion, net income decreased to $508 million from $527.2 million, and diluted earnings per share declined to $1.56 from $1.59 a year ago. 

The company guided full-year earnings per share to range between $6.08 and $6.21, compared to $6.32 a year ago. 

 The company anticipated a tariff-driven hit of between 22 cents and 25 cents per share in the fiscal year ending on January 31, 2026.