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Wal-Mart's (WMT.US) warning sparks market volatility, Dow experiences its largest daily loss in over a month.

Market IntelThursday, Feb 20, 2025 5:41 pm ET
1min read

U.S. stocks experienced a pullback on Thursday, with the market largely attributing the blame to a weak earnings forecast from retail giant and consumer market indicator Walmart (WMT.US). Although the overall market did not see a significant sell-off, the Dow Jones Industrial Average briefly fell more than 520 points, or 1.2%, its biggest one-day drop since Jan. 10. The S&P 500 also retreated more than 0.4%, after hitting a record high for two consecutive days.As a key indicator of the U.S. consumer market, Walmart's cautious guidance raised concerns among investors about the economic outlook. NFJ Investments portfolio manager Burns McKinney stated, "Walmart's performance serves as an important indicator of U.S. consumers, and in the context of already elevated market valuations, any signs of economic slowdown could serve as a trigger for market correction."Interactive Brokers senior economist Jose Torres also noted that Walmart's cautious guidance served as a renewed warning, especially in the backdrop of escalating trade tensions that could push up commodity costs. He wrote in his report, "With households already facing high inflation pressures, heavy borrowing costs, and a tightening credit environment, Walmart's earnings report signals a potential slowdown later this year."During the earnings call, Walmart CFO John David Rainey was asked about the impact of Trump's tariff policies on the company's performance. He responded by stating that no specific tariff assumptions were included in the company's guidance and that Walmart was well-positioned to navigate this uncertainty.Despite the short-term market pullback, some analysts believe that this does not necessarily signal a large-scale adjustment. Torres noted that key drivers of economic growth, such as an active capital market and a tight labor market, remain solid. As of the beginning of the year, U.S. stocks have still risen more than 3%, with a strong labor market providing support for the economy.Navellier&Associates founder Louis Navellier stated that the market's pullback was not unexpected, especially after the S&P 500 had just set a record high for two consecutive days. "This was a delayed, modest pullback," he noted in his report.Recent market adjustments have generally been of shorter duration, and investors remain inclined to buy on dips. Navellier stated, "Ultimately, the market will see a real correction, but there are no obvious catalysts at this point that would signal the start of this pullback."

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Andrew ford
02/20

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dantheman2108
02/21
@Andrew ford 💸
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stertercsi
02/20
WMT's earnings call was a mixed bag.
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Ok_Secret4642
02/20
Tariffs are a wildcard. Companies need to adapt. Guidance without specifics just adds to the uncertainty noise.
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Most_Caramel_8001
02/20
Investors be like, "Tariffs? Nah, we got this." But Walmart's earnings say, "Uh, maybe think again."
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ContentSort1597
02/20
Market's jitters over nothing, just a blip.
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WickedSensitiveCrew
02/20
Holding $WMT, hedging with $TSLA for balance.
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josh252
02/20
Walmart's earnings are like a weather vane for the consumer market. Investors need to watch those signals closely.
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abdul10000
02/20
Dow's drop wasn't a big deal. Bears are just whining about valuations. Bulls ready for dip buying.
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SelectHuckleberrys
02/20
Tariffs biting, inflation's a real deal now.
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