Major U.S. stock indexes ended lower on Thursday, weighed down by cautious guidance from Walmart, which raised concerns about consumer spending and broader economic health.
Walmart, the nation’s largest retailer, posted strong earnings that met expectations. However, the company’s weaker-than-expected sales forecast for the upcoming year unsettled investors, leading to a sharp 6.5% drop in its shares. Walmart’s Chief Financial Officer, John David Rainey, noted, “Wallets are still stretched,” highlighting ongoing pressures on consumer spending.
Walmart’s Outlook Sparks Worries
Despite strong results, Walmart’s sales guidance for the year ahead disappointed, triggering concerns over the strength of U.S. consumer demand. The guidance sent a negative signal, especially after U.S. retail sales unexpectedly fell in January. The company’s outlook “raised another red flag just as mounting trade tensions threaten to drive up the cost of goods,” said José Torres, senior economist at Interactive Brokers.
Bank Stocks Suffer Amid Economic Concerns
Bank stocks also saw significant losses, with Goldman Sachs and JPMorgan Chase each dropping about 4%. While there was no clear news catalyst behind the decline, analysts pointed to rising economic uncertainties and concerns about slowing growth. The drop in financial stocks, coupled with Walmart’s poor guidance, weighed heavily on the Dow Jones Industrial Average, which closed in the red.
Palantir Faces Setback Amid Defense Budget Concerns
Palantir, a market darling in recent years, also faced pressure as reports surfaced about potential cuts to the U.S. defense budget. Shares of the data analytics firm extended losses from Wednesday, reflecting broader investor concerns about its future prospects.
Trade Tensions and Market Sentiment
On the geopolitical front, President Trump stated late Wednesday that a deal with China on trade was still a possibility. However, the news failed to generate any significant positive momentum, with Chinese stocks and the yuan remaining relatively flat.
Gold Hits Record High
In contrast to the broader market decline, gold continued its rally, reaching a new record high as investors sought safety amidst economic and geopolitical uncertainty.
Overall, the market remained on edge, with concerns about consumer spending, trade tensions, and potential defense budget cuts overshadowing investor sentiment. As earnings season continues, all eyes will remain on how major corporations navigate the economic headwinds of 2025.
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