Depot

When Home Depot (HD -0.68%) talks, the stock market listens. The blue chip Dow Jones Industrial Average component is a bellwether for consumer spending and the housing market.

In recent years, Home Depot’s results have disappointed. Earnings have been falling, and fiscal 2025 same-store sales are expected to grow by just 1%. But that sluggish growth could quickly fade into the rearview mirror.

In an effort to maximize employment and reduce inflation to 2% over the long run, Jerome Powell and the Federal Reserve are cutting interest rates by 0.25% — citing a weak labor market and “somewhat elevated” inflation. More cuts could be in the cards to boost consumer spending and avoid a recession. Although artificial intelligence (AI) has been driving the stock market to record highs, U.S. gross domestic product growth is projected to be just 1.6% in 2025 and under 2% every year through 2028 — illustrating weakness in the broader economy.

Here’s why an interest rate cut is great news for Home Depot, and whether the dividend stock is a buy now.

Image source: Getty Images.

A much-needed jolt

Higher interest rates have a significant impact on consumer spending, particularly on discretionary goods, services, and travel. When money is more readily available for borrowing, consumers may opt for a car loan or a mortgage because the monthly payment is lower. Or they may finance a home improvement project. In this vein, lower interest rates can lead to an increase in renovation projects, which benefits Home Depot.

There’s a big difference between going to Home Depot for a few spare parts to fix an appliance and redoing an entire room or section of a house. And Home Depot’s poor results suggest that a lot of customers are putting off big projects until conditions improve.

On its August earnings call (second quarter 2025), Home Depot said that lower interest rates would help boost demand and provide relief for mortgages. Home Depot CEO Ted Decker said the following:

When we talk generally though to our customers, each of our sets of consumers and pros, the number one reason for deferring the large project is general economic uncertainty, that is larger than prices of projects, of labor availability, all the various things we’ve talked about in the past. By a wide margin, economic uncertainty is number one.

The prospect of good-paying jobs and lower interest rates could certainly give Home Depot’s residential business a lift. However, the company has also been investing heavily in its professional and commercial contractor business. In June 2024, Home Depot completed its $18.25 billion acquisition of SRS Distribution, expanding its home improvement and construction business. SRS specializes in selling roofing products to contractors — which provides cross-selling opportunities with Home Depot’s retail outlets.

Home Depot made the SRS acquisition in the middle of an industrywide downturn — a sign that it is investing for the long term. SRS essentially makes Home Depot even more of a coiled spring for the next cyclical expansion period, potentially amplifying the benefits the company will feel from lower interest rates.

Taking a home improvement rebound for granted

The market is forward-looking and cares more about where businesses are headed than where they have been. And unfortunately for investors considering Home Depot, the stock is already priced as if interest rates will continue to fall.

As you can see in the following chart, Home Depot’s earnings were on the rise leading up to the pandemic, then entered a new phase during the pandemic as consumers accelerated spending on do-it-yourself home improvement projects, driven by low interest rates.

HD data by YCharts

But Home Depot’s earnings have been ticking down in recent years even though its stock price is around an all-time high — suggesting that investors are looking past the company’s near-term struggles in anticipation of a recovery.

In February, Home Depot raised its dividend by the lowest amount in 15 years and issued a dire warning to investors about a prolonged downturn in the home improvement industry. So it could take several interest rate cuts to really move the needle on consumer spending at Home Depot.

In the meantime, the stock is on the expensive side, with a price-to-earnings ratio of 28.2 and a forward P/E of 27.7 compared to a 10-year median P/E of just 23. Meaning that Home Depot’s earnings would need to grow 20% faster than its stock price just for the valuation to come back down to historical averages over the last decade.

A quality company at a premium valuation

Home Depot is an excellent company, but it is already priced for a recovery. So the stock isn’t a screaming buy now.

The good news is that Home Depot could still be a good buy for long-term investors who believe in the company’s potential for store expansions, same-store sales growth, and that the SRS acquisition will pay off. If Home Depot enters a multiyear period of double-digit earnings growth, its valuation could quickly come down, making the stock more attractive.

Home Depot could also reaccelerate its dividend growth rate, building on its 16-year track record of consecutive annual dividend raises. Home Depot yields 2.2% — which is better than the 1.2% yield of the S&P 500.

All told, Home Depot isn’t a no-brainer buy now because the stock price has run up ahead of anticipated rate cuts. But it’s still a decent buy for long-term investors.

Ukraine has regularly hit Russian oil and gas infrastructure in response to attacks on its own territory.

An overnight Ukrainian drone attack has sparked a fire at an oil depot in Sochi, the southwestern Russian resort that hosted the 2014 Winter Olympic Games, local authorities say.

The attack came a day after Ukraine’s military said it struck the Ryazan oil refinery in central Russia, causing a fire. Ukraine has regularly hit Russian oil and gas infrastructure in response to attacks on its own territory since Russia began its war in February 2022.

“Sochi suffered a drone attack by the Kyiv regime last night,” the governor of Russia’s Krasnodar region, Veniamin Kondratiev, said on the Telegram messaging application on Sunday.

Drone wreckage hit an “oil tank, which caused a fire”, Kondratiev said.

Sochi Mayor Andrei Proshunin said there were no victims and “the situation is totally under control”, adding that firefighters were extinguishing the blaze.

Air traffic was briefly suspended at Sochi’s airport but has resumed, Russia’s air transport regulator Rosaviatsia said.

Air strikes on Sochi, about 400km (250 miles) southeast of the Ukrainian border, are relatively rare compared with other Russian cities. However, Ukrainian drone attacks killed two people in the region late last month, according to local authorities.

Ukrainian officials have not commented on the fire.

Kyiv has warned it will intensify its air strikes against Russia in response to an increase in Russian attacks on its territory in recent weeks, which have killed dozens of civilians.

On Sunday, Ukraine’s air force said on Telegram that Russia had launched 76 attack drones and seven missiles targeting Ukraine overnight, striking eight locations throughout Ukraine. Ukraine’s air defence units destroyed 60 of the drones and one missile, it said.

In the front-line regions of Zaporizhia and Kherson, at least three people were killed and more than 12 injured in Russian attacks over the 24 hours into Sunday morning, regional governors said.

A Russian missile strike on the city of Mykolaiv in southern Ukraine also injured at least seven people and destroyed or damaged dozens of homes and civilian infrastructure, the regional governor said.

In the early days of the war, the Mykolaiv region stood on the front lines, facing frequent artillery strikes and aerial attacks. Even after Russian forces were pushed back in late 2022, drones and missiles have remained a constant danger there.

Russia also launched a short-lived missile attack on Kyiv overnight, but there have been no reports of injuries or damage.

In July, United States President Donald Trump said he would implement “severe tariffs” on Russia unless a peace deal is reached by early September. Last week, Trump said he would give Putin 10 to 12 days, meaning Trump wants peace efforts to make progress by Thursday to Saturday.

So far, the Kremlin has rejected the idea of a lasting ceasefire in Ukraine.

Last week, Russian President Vladimir Putin said he wanted peace but his demands for ending Moscow’s military offensive were “unchanged”.

Those demands include Ukraine abandoning some of its own territory and ending its ambitions to join NATO.

EDINBURGH, Scotland — President Trump said Monday he intends to shorten the 50-day deadline he gave Russian President Vladimir Putin to reach a deal that ends the three-year war in Ukraine, after Russia continued to bombard Ukrainian cities.

Russia fired an overnight barrage of more than 300 drones, four cruise missiles and three ballistic missiles, the Ukrainian air force said.

Trump said two weeks ago he would implement “severe tariffs” on Russia unless a peace deal is reached by early September, as he expressed exasperation with Putin over the bombardment of Ukrainian cities amid the Republican president’s attempts to stop the fighting.

Trump said he would now give Putin 10 to 12 days from Monday, meaning he wants peace efforts to make progress by Aug. 7-9. The plan includes possible sanctions and secondary tariffs targeting Russia’s trading partners. The formal announcement would come later Monday or on Tuesday, he said.

“No reason in waiting,” Trump said of the shorter timeline. “We just don’t see any progress being made.”

Putin has “got to make a deal. Too many people are dying,” Trump said during a visit to Scotland.

There was no immediate response from Russia.

Trump repeated his criticism of Putin for talking about ending the war but continuing to bombard Ukrainian civilians.

“And I say, that’s not the way to do it,” Trump said. He added, “I’m disappointed in President Putin.”

Asked at a news conference about a potential meeting with the Russian leader, Trump said: “I’m not so interested in talking anymore.”

Still, he voiced some reluctance about imposing penalties on the Kremlin, saying that he loves the Russian people. “I don’t want to do that to Russia,” he said, but he noted how many Russians, along with Ukrainians, are dying in the war.

Ukraine has urged Western countries to take a tougher line with Putin. Andrii Yermak, the head of Ukraine’s presidential office, thanked Trump for shortening the deadline.

“Putin understands only strength — and that has been conveyed clearly and loudly,” Yermak said on Telegram, adding that Ukrainian President Volodymyr Zelensky shared the sentiment.

Latest attacks in Ukraine

A Russian drone blew out the windows of a 25-story residential building in the Darnytskyi district of Kyiv, the head of the city’s military administration, Tymur Tkachenko, wrote on Telegram. Eight people were injured, including a 4-year-old girl, he said.

The attack also started a fire in Kropyvnytskyi, in central Ukraine, local officials said, but no injuries were reported.

The main target of the Russian attack was Starokostiantyniv, in the Khmelnytskyi region of western Ukraine, the air force said. Regional authorities reported no damage or casualties.

Western Ukraine is on the other side of the country from the front line, and the Ukrainian military is believed to have significant airfields as well as arsenals and depots there.

The Russian Defense Ministry said its forces carried out an overnight strike with long-range, air-launched weapons, hitting a Ukrainian air base along with an ammunition depot containing stockpiles of missiles and components for drone production.

Weissert writes for the Associated Press. AP journalist Illia Novikov in Kyiv, Ukraine, contributed to this report.

June 30 (UPI) — Home Depot on Monday announced an agreement to buy GMS, a leading specialty building products distributor.

The deal, which is expected to be completed in 2026, will see Home Depot acquire GMS for $4.3 billion as it aims to draw in more sales from contractors and other home professionals.

GMS is a distributor of specialty products which include drywall, ceilings, steel framing and other products related to construction and remodeling projects in residential and commercial end markets.

“We are excited to join with SRS and The Home Depot, and we believe this transaction delivers significant value to our customers, suppliers and team,” said president and CEO of GMS, John C. Turner, Jr.

GMS shares were up more than 11%, while Home Depots’ rose slightly in early trading.

Home Depot subsidiary SRS distribution will buy all shares of GMS for $110, as part of the deal, the company said. The total enterprise value is approximately $5.5 billion.

“The combination of GMS and SRS will provide the residential and commercial Pro customer with more fulfillment and service options than ever before. Together, we’ll create a network of more than 1,200 locations and a fleet of more than 8,000 trucks capable of making tens of thousands of jobsite deliveries per day,” said CEO of SRS, Dan Tinker. “GMS is an industry leader with a proven track record of growth, and we look forward to welcoming the entire GMS team to SRS and capturing the exciting opportunity ahead.”

The GMS acquisition is expected to be completed by early 2026, Home Depot said.

Hundreds of eighth-graders in freshly ironed button-down shirts and flowing dresses filed into Andrew Carnegie Middle School with their families Tuesday morning in high spirits.

But the graduation festivities at the school in Carson had an ominous undertone, as word had spread ahead of the event that U.S. Immigration and Customs Enforcement might make an unwanted appearance.

Nervous parents and educators browsed apps dedicated to tracking ICE activity, refreshed their social media feeds and conferred with one another about the latest rumors. Some students who had been expected to attend the event did not come to the stage when their names were called. They had chosen to stay home out of fear that they or their loved ones would be detained.

Similar scenes have played out repeatedly across Los Angeles County in recent days, with the Trump administration deploying swarms of federal agents to detain immigrants.

Jacob Johnson, left, walks with his family after graduating as valedictorian from Andrew Carnegie Middle School in Carson on Tuesday. The arrival time for graduates and their family was moved up at the school to avoid potential confrontations with ICE.

In neighborhoods with large populations of foreign-born people across the region, every commute, trip to the grocery store or school drop-off has come to represent another potential final moment in lives built in this country.

In the span of just a few hours Tuesday, unverified messages posted online rapidly spread warnings about ICE agents being spotted near schools, hotels and hardware stores, leading to panic and disruption.

At Carnegie, the prospect of a raid was all anyone could talk about.

The school had sent out a message ahead of the event informing parents and students that “all guests will be admitted onto campus immediately — no waiting outside — due to ongoing concerns in our community related to the Department of Homeland Security (ICE).”

Mekeisha Madden Toby, 48, was there Tuesday morning to celebrate the graduation of her 14-year-old daughter, Zoe.

“It’s bittersweet because it’s supposed to be a celebration moment and it kind of got overshadowed by fear,” the mother said. “Your friend or your friend’s abuela could get snatched. You have to be aware, and you can’t even fully celebrate a graduation without thinking about it.”

“It’s not fair for these kids to put all this time and effort into school only to have to be concerned about their safety,” said Gardena High School junior Chris Alvarez, left, next to his cousin, Gardena High School graduate Anthony Garcia, 18, in Gardena on Tuesday.

Federal agents — often in plainclothes and unmarked vehicles — have raided L.A. County businesses, homes and even an underground nightclub in recent weeks, detaining scores of people in the process, including children.

Earlier this month, ICE detained a Torrance Elementary School fourth-grader, who was transferred to an immigration facility in Texas. Federal officials have since deported the 9-year-old and his father to Honduras.

Multiple recent incidents captured on video showed ICE agents in L.A. County confronting people on the streets — seemingly at random in some cases — and quickly whisking them away, offering no explanation to shocked loved ones and onlookers. Footage reviewed by The Times showed a Sunday raid in which unidentified law enforcement agents detained a fruit vendor in Westchester.

“They had him pressed down on the ground, they had weapons drawn so no one could get near to help him. It just looked like he had been kidnapped,” said witness Yuliza Barraza, 45. “Everyone was in shock and awe.”

White House Press Secretary Karoline Leavitt said during a press briefing Wednesday that 330 people had been arrested since Friday in the immigration sweeps in ICE’s Los Angeles Area of Responsibility, which stretches from San Luis Obispo to San Diego.

ICE shared photos on social media Tuesday showing armed members of the military accompanying immigration agents on L.A. raids. In recent days, Trump announced that he was sending a total of 700 U.S. Marines and 4,000 National Guard troops to L.A. to respond to protests and support federal operations.

Gov. Gavin Newsom and L.A. Mayor Karen Bass have demanded a detente, but to no avail. Bass called on Trump to “stop the raids” during a news conference Tuesday.

“We never know when, we never know how long” they will be, she said. “But that very notion creates such a terrible sense of fear in our city, and it’s just not right to do that to a population who’s trying to survive.”

Two Times journalists spent most of the day criss-crossing L.A. County’s southern reaches to document the disruption and trauma caused by the omnipresent specter of ICE. Following alerts shared on an assortment of online platforms, the journalists visited communities with significant foreign-born populations, such as Carson, Torrance, Gardena, Compton, Bell Gardens, and Long Beach, and nearby neighborhoods in the city of L.A.

Many people were on edge, even U.S. citizens not at risk of being deported. At a care facility for disabled adults in Torrance, one staffer — who declined to give her name out of fear of retaliation — said she had not seen an alert about a reported ICE sighting outside the facility that had been posted on Ice Block, one of the apps that circulates user-generated reports of federal actions.

But she said in a half-whisper that a friend had spotted U.S. Customs and Border Protection agents on a residential street a few blocks away. It was unclear whether anyone had been detained in the area.

“It’s so scary what they’re doing,” she said.

Angelica Salas, executive director of the Coalition for Human Rights of Los Angeles characterized the sweeps as an unprecedented “enforcement blitz” in which people are being “indiscriminately” targeted. Her organization, she said, has received 3,000 calls for service since Thursday.

In Signal Hill, the mood among a handful of day laborers who were posted up on a patch of grass near a Home Depot on Tuesday afternoon was jovial and almost defiant.

“I’m not worried,” one of the men said as pickup trucks laden with heavy lumber rumbled past. But he declined to give his name, not wanting to risk immigration agents tracking him down.

Andrew Carnegie Middle’s graduation in Carson ultimately went off without any interruptions by law enforcement. But attendees said they were asked at the last minute to show up at 7:30 a.m. instead of the previously planned 8:00 a.m. in an effort to avoid confrontations with ICE outside the school.

“They changed the graduation time because they were worried about people getting snatched up and taken,” said Zoe Toby, who wore a black Class of 2025 sash and blue lei over her gray-blue dress to celebrate her final day at Carnegie. “It’s scary because you never know when it’s going to happen.”

During the ceremony, some parents received notifications via the Ice Block app and social media warning that immigration enforcement officers were seen near the school. There was no confirmation of anyone being detained.

Zoe said some of her friends worry every day about being taken away by federal agents. Many of them have received red cards from the school explaining their rights, she added, pulling a picture up on her phone of one of the many posters emblazoned with the words “This classroom is a safe space for immigrants” that she said have been posted on the middle school’s walls.

“I’m on the Nextdoor app,” Zoe’s mother added, “and every day there’s neighbors warning each other” about ICE activity.

Gardena police officers keep a watchful eye out as Gardena High School graduates mingle with family and friends on Tuesday.

Later Tuesday, hundreds of teenagers in caps and gowns spilled out onto the street next to Gardena High School to revel in their first moments as high school graduates. Like in Carson, people were smiling and embracing one another as roadside vendors sold snacks and flower bouquets.

Chris Alvarez, a junior, was there to celebrate his 18-year-old cousin Anthony Garcia’s graduation. In between jokes with his friends and relatives, Chris, 17, said he’s “not really worried” about ICE, but he was dismayed by online warnings that agents had been spotted near his school earlier Tuesday.

“It’s not fair for these kids to put all this time and effort into school only to have to be concerned about their safety and the safety of their family and their friends,” he said. “This should be a celebration.”

For Orlando Johnson, principal of Susan Miller Dorsey Senior High School in South Los Angeles, safety is paramount amid the ongoing threat posed by the immigration crackdown.

“The focus is just on protecting our families and protecting our students. We don’t know what information’s real and not real,” he said Tuesday. “I think everybody’s concerned.”

Times staff writers Andrea Castillo and Rachel Uranga and L.A. Times Studio senior producer Karen Foshay contributed to this report.