Dow Futures Retreat, Nasdaq Futures Edge Higher After Walmart's Warning

Stock futures are trading mixed on Thursday morning, with Dow futures retreating and Nasdaq futures edging higher, following Walmart's muted outlook for 2025. The retail giant warned investors that its sales and profit growth will slow this year, sending its stock tumbling around 6% during early trading and dragging down the Dow, which fell more than 1%.
Walmart's warning comes as the company faces several challenges, including President Trump's tariff threats and a pullback in consumer spending. The company expects sales to grow by up to 4% this year and profit to grow by up to 5.5%, which was short of investor expectations. Walmart's CFO, John David Rainey, acknowledged that the company will have to navigate tariffs and manage other challenges, including the potential impact of President Trump's renewed tariff threats on goods from Canada, Mexico, and China.
The company's outlook also reflects concerns about consumer sentiment and spending. Walmart noted that consumers are likely bracing for higher prices and perhaps limited inventories due to tariff threats. Additionally, January retail sales fell the most in two years, and February consumer sentiment based on the University of Michigan survey fell to the lowest level in seven months. These factors suggest that consumers may be more cautious with their spending, which could negatively impact Walmart's sales and earnings.
Walmart's warning has raised concerns about the broader retail sector and consumer sentiment. The company's slowdown in sales and profit growth could indicate a broader trend in the retail sector, as consumers may be more discerning about their purchases due to higher costs for credit and groceries. This could lead to a decrease in consumer spending, which would have ramifications beyond Walmart's sales.
The market's fears on Thursday may have been slightly overblown, according to Art Hogan, chief market strategist at B. Riley Wealth Management. He added that Friday's economic data releases, which include the latest purchasing managers' index readings and January's existing home sales, will point equities in a direction to end the week. "There's a chance that there's enough overall selling pressure that might drive in some margin hunters on Friday and try to claw back some of the losses that we're seeing today," he told CNBC in an interview. "I certainly think you'll get a sense tomorrow if investors feel like in the near term the moves today are overdone, especially if the PMIs and existing home sales are in line."
In conclusion, Walmart's muted outlook for 2025 has raised concerns about the broader retail sector and consumer sentiment. The company's warning about the challenges ahead, including tariffs and a pullback in consumer spending, suggests that the retail industry may face a rockier year in 2025. This could lead to a decrease in consumer confidence, as shoppers may become more cautious about spending due to higher prices and limited inventories. Additionally, the slowdown in Walmart's sales and profit growth could indicate a broader trend in the retail sector, as consumers may be more discerning about their purchases due to higher costs for credit and groceries. This could lead to a decrease in consumer spending, which would have ramifications beyond Walmart's sales.