Walmart's Q4 Surprise, EV's Latest, and the Fed's Tariff Worries

Walmart Inc. (NYSE: WMT) surprised investors with its Q4 FY25 earnings report, released on February 20, 2025. The retail giant reported strong revenue growth of 4.1% (5.3% in constant currency) and operating income growth of 8.3% (9.4% adjusted in constant currency). Global eCommerce sales grew 16%, with penetration increasing across all segments. Walmart U.S. comp sales grew 4.6%, driven by broad-based sales momentum and strong seasonal sales despite a compressed holiday shopping season.

However, Walmart's stock price may experience some volatility in the short term, as the company's guidance for FY26 may not meet market expectations. Walmart expects net sales to grow 3% to 4% and adjusted operating income in constant currency to grow 3.5% to 5.5%, including a headwind of 150 basis points from the VIZIO acquisition and lapping a leap year. This guidance may be seen as conservative by some investors, leading to a temporary decline in the stock price.



Meanwhile, the electric vehicle (EV) market continues to make waves. Tesla (NASDAQ: TSLA) recently announced its Q4 2024 earnings, with a surprise profit of $1.2 billion, beating analyst estimates. The company's stock price has surged, reaching an all-time high of $450 per share. Other EV manufacturers, such as Rivian (NASDAQ: RIVN) and Lucid Motors (NASDAQ: LCID), have also seen their stock prices rise, reflecting the growing demand for electric vehicles.



However, the EV market faces challenges, including supply chain issues and competition from established automakers. The recent announcement of Ford's (NYSE: F) plans to invest $35 billion in EVs by 2025 has raised the stakes in the EV race. As the market continues to evolve, investors should keep a close eye on the performance of EV manufacturers and their ability to adapt to changing market conditions.



The Federal Reserve (Fed) is keeping a close eye on the potential impacts of President Trump's proposed tariffs on the U.S. economy. In its January meeting minutes, the Fed acknowledged concerns about the effects of potential changes in trade and immigration policy on inflation. The proposed tariffs, which could nearly double U.S. inflation if fully imposed, have the potential to disrupt global supply chains and increase consumer prices.

The Fed has expressed concern about the potential for policy changes to keep inflation above its target. While the current policy stance is "significantly less restrictive," Fed officials have indicated that they would want to see further progress on inflation before making additional adjustments to the target range for the federal funds rate. As the situation evolves, investors should monitor the Fed's communications and policy decisions for clues about the potential impact of tariffs on the U.S. economy and financial markets.

In conclusion, Walmart's Q4 FY25 earnings report has provided a mixed bag of results, with strong revenue growth and operating income growth offset by conservative guidance for FY26. The EV market continues to gain momentum, with Tesla leading the way, but faces challenges from competition and supply chain issues. The Fed is closely monitoring the potential impacts of President Trump's proposed tariffs on the U.S. economy and inflation. As the situation evolves, investors should stay informed about the latest developments in these areas and adjust their portfolios accordingly.