Across the S&P 500 (SPY) and Nasdaq-100 (QQQ), investors are bracing for pockets of downside risk. Management teams are telegraphing layoffs, trimming or guiding down earnings, and some names are flashing stress in liquidity, dividend policy, credit quality, and insider behavior. Which sectors are shouldering the most negative sentiment, and which companies are moving from “watch” to “act” on layoffs, negative guidance, liquidity risks, suspended dividends, credit downgrades, or unusually large insider sales?

We used our agentic AI tool—Alfa™—to scan every SPY and QQQ constituent for those red flags across filings, calls, 8-Ks, ratings actions, and insider forms. Here’s the portfolio-wide risk brief Alfa™ created, or, the Alfa™ Angle.

The negative signals for companies in SPY and QQQ

Cisco Systems, Inc.

• Layoffs and Restructuring Plans: Cisco announced a restructuring plan in fiscal 2025, impacting approximately 7% of its global workforce, with estimated pre-tax charges of up to $1 billion, primarily consisting of severance and other one-time termination benefits.  
• Increased Supply Chain Exposure: Cisco's supply chain exposure has significantly increased due to additional purchase commitments with contract manufacturers and suppliers, which has negatively impacted product gross margins and may continue to do so in future periods.  
• Restructuring Charges: Cisco incurred restructuring charges of $744 million in fiscal 2025 as part of its plan to invest in key growth opportunities and drive efficiencies.
• Impact on Gross Margins: The company's gross margins have been affected by various factors, including increased supply chain exposure and restructuring activities, which may lead to further negative impacts in future periods.
• Liquidity and Capital Resources: Cisco believes its cash and cash equivalents, investments, and ability to access capital markets will satisfy its liquidity requirements for at least the next 12 months.

Best Buy Co., Inc.

• Layoffs in Geek Squad: Best Buy announced layoffs affecting its Geek Squad team as part of a broader restructuring effort aimed at shifting resources towards areas like artificial intelligence.
• Restructuring Initiatives: The company commenced a restructuring initiative in the second quarter of fiscal 2026 to align field resources with changing customer behaviors and close select non-traditional store locations.
• Cost-Cutting Measures: Best Buy's restructuring charges in fiscal 2026 included a Labor and Store Optimization Initiative.
  
• Liquidity Management: Best Buy closely manages its liquidity and capital resources.
• Termination Benefits: The restructuring initiatives included termination benefits totaling $81 million as of August 2, 2025, reflecting expected future cash payments primarily during fiscal 2026.
• Store Closures: Best Buy plans to reduce its traditional Domestic store count by approximately 5 to 10 stores in fiscal 2026 as part of its restructuring efforts.
• Cash Flow Management: The decrease in cash provided by operating activities in the first six months of fiscal 2026 was primarily driven by the timing and volume of inventory purchases and payments, and lower net earnings.
• Dividend Payments: Cash dividends declared and paid decreased during the second quarter and first six months of fiscal 2026 due to fewer shares outstanding, partially offset by increases in the regular quarterly cash dividend per share.

General Mills, Inc.

• Negative earnings guidance: General Mills anticipates that the net impact of divestitures and acquisitions will reduce adjusted operating profit growth by approximately 5 points in fiscal 2026, indicating a negative outlook for earnings growth.
• Cost-cutting initiatives: The company is implementing restructuring and transformation actions.
• Restructuring charges: General Mills recorded a significant increase in restructuring, transformation, and impairment charges in the first quarter of fiscal 2026, from $2.9 million in the same period of fiscal 2025.
• Liquidity risks: Cash provided by operations decreased by $227 million in the first quarter of fiscal 2026 compared to the same period last year, primarily due to a $434 million decrease in net earnings excluding the pretax gain on divestitures.
• Dividend considerations: There is a potential for accelerating the payout of dividends if subsequent quarters show solid results, as indicated by management discussions.

See any potential negative sentiment across all the other companies in SPY and QQQ here

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