Retailers HD and LOW fell 2.5%-3% post-Fed decision but recovered losses the next day amid housing market pressures.
Shares of Home Depot (HD) and Lowe’s (LOW) declined 2.5% to 3% after the Federal Reserve left interest rates unchanged following its June 17 meeting. The unanimous decision, led by new Fed Chair Kevin Warsh, kept the federal funds rate steady, focusing on inflationary pressures.
The housing market faces headwinds from elevated mortgage rates, with the 30-year fixed rate at 6.47%. Higher borrowing costs reduce housing turnover and new construction, impacting home improvement retailers. Home Depot CEO Ted Decker noted on the Q1 2026 earnings call that industry growth remains subdued due to low turnover and declining starts.
By June 18, both stocks had recovered their losses, but the volatility underscored sensitivity to macroeconomic factors. Investors had anticipated potential rate cuts to support housing activity.