US Stocks Pull Back Amid Walmart Outlook and Trump Policy Concerns
US stocks experienced a decline on Thursday as investors analyzed Walmart's (WMT) earnings and remained cautious due to repercussions from President Trump's planned tariffs and policy shifts. The S&P 500 (^GSPC) shed 0.2% after reaching a record high for the second consecutive day on Wednesday. The Dow Jones Industrial Average (^DJI) lost 0.4%, while the tech-heavy Nasdaq Composite (^IXIC) retreated approximately 0.1%.
Concerns escalated regarding upcoming challenges for corporate America following Walmart's pessimistic 2025 outlook. Despite the retail giant meeting high expectations for profit and revenue, its shares plunged over 4%.
Trump's tariffs represent a looming challenge, prompting companies like General Motors (GM) to contemplate significant business changes. Another aspect of his policy overhaul is a proposed 8% reduction in military spending, negatively impacting Palantir's (PLTR) stock. Markets were already apprehensive about Trump's next move after a confrontation with Ukraine's president raised geopolitical worries.
As investors shied away from risk, gold (GC=F) reached a new record high. Conversely, the Federal Reserve's skepticism concerning White House policies dampened sentiment, with investors losing confidence in the likelihood of interest rate cuts.
Walmart's Downbeat Outlook Weighs on Stock
Major market indices opened lower on Thursday as Walmart (WMT) shares sank by over 4%. This decline occurred after the company released a conservative outlook and investors contemplated the potential impact of President Trump's tariff and government overhaul policies. The S&P 500 (^GSPC) retreated 0.2% from its record closing high, while the Dow Jones Industrial Average (^DJI) fell 0.3%. The tech-heavy Nasdaq Composite (^IXIC) also declined by nearly 0.2%.
Walmart's quarterly profit and revenue met expectations, but its 2025 outlook exerted pressure on the stock on Thursday morning. For fiscal year 2026, Walmart provided conservative guidance, consistent with its approach in recent years. The company projected a 3% to 4% increase in net sales.
Meanwhile, industries across the board are evaluating the implications of President Trump's evolving tariff policies. Shares of software contractor Palantir (PLTR) continued to decline from the previous session on Thursday following news of an 8% cut in Pentagon spending over the next five years.
Carvana Stock Slides Despite Earnings Beat
Online car retailer Carvana (CVNA) reported revenue and profit that surpassed estimates on Wednesday, signaling its continued recovery from a period of instability. Despite the earnings beat, investors reacted cautiously to the stock. Carvana shares fell over 8% in premarket trading on Thursday, having recently reached a new 52-week high.
Alibaba Earnings Point to AI-Driven Recovery
Alibaba shares surged almost 7% in premarket trading after the Chinese online retailer reported quarterly revenue that beat expectations. The company's earnings signaled signs of a turnaround fueled by AI advancements.
Geopolitical Concerns Drive Demand for Gold
Worries about geopolitical tensions intensified after President Trump labeled his Ukrainian counterpart a "dictator," prompting investors to seek shelter in gold and other less risky assets on Thursday. Gold (GC=F) reached a new record high, reflecting the heightened demand for safe-haven assets.
Morgan Stanley Reverses Views on Chinese Bear Market
Morgan Stanley (MS) strategists have adopted a bullish outlook on Chinese stocks, reversing a previously bearish stance. This shift represents part of a wave of Wall Street support predicting a surge driven by technological advancements in the country, particularly in artificial intelligence (AI).