Market Recap: Wall Street Slips on Walmart’s Cautious Outlook and Tariff Concerns

Major Indexes Retreat Amid Mixed Corporate Earnings

On Thursday, February 20, 2025, U.S. stock markets experienced a downturn as investors grappled with disappointing guidance from retail giant Walmart and renewed concerns over potential tariffs. The day’s trading session saw major indexes pull back from recent highs, reflecting a cautious sentiment among market participants.

The Dow Jones Industrial Average (^DJI) fell by 1.35%, or approximately 600 points, closing at 44,027.21. The S&P 500 (^GSPC) dropped 0.70%, ending its streak of record-breaking closes, while the tech-heavy Nasdaq Composite (^IXIC) declined by 0.72%.

Walmart’s Forecast Dampens Retail Sector

The day’s biggest market mover was Walmart (WMT), which saw its shares tumble by 6.40% after issuing a cautious outlook for fiscal year 2026. Despite beating quarterly profit expectations, the retail behemoth’s conservative guidance sparked concerns about consumer spending and inflationary pressures. Walmart’s performance had a ripple effect across the retail sector, with other major players like Target (TGT) and Costco Wholesale (COST) experiencing declines between 1.2% and 1.8%.

Tariff Threats Reignite Trade Concerns

Adding to market jitters were renewed tariff threats from President Trump. The administration announced plans to impose fresh tariffs on lumber and forest products, in addition to previously announced duties on imported cars, semiconductors, and pharmaceuticals. These potential trade barriers have raised inflationary concerns at the Federal Reserve, as revealed in the minutes from their January policy meeting.

Tech and Financial Sectors Feel the Heat

The technology sector saw notable declines, with some of 2025’s top performers experiencing significant pullbacks. Intel (INTC), Crowdstrike (CRWD), and Palantir (PLTR) all dropped by 3% or more. Palantir, in particular, fell by 7.8% following news of potential budget cuts at the Pentagon.

The financial sector led the losses among S&P 500 sectors, declining by more than 2%. Banking giants Goldman Sachs (GS), JPMorgan (JPM), and Morgan Stanley (MS) all saw their shares drop by over 4%, despite being up at least 10% for the year.

Bright Spots Amid Market Turbulence

Despite the overall market downturn, some companies managed to buck the trend. Alibaba Group (BABA) saw its U.S.-listed shares surge by 13.4% after reporting better-than-expected third-quarter revenue. Hasbro (HAS) also impressed investors, with its shares climbing 9.7% following strong quarterly results that beat both profit and revenue estimates.

Looking Ahead: Upcoming Earnings and Economic Data

As we move forward, market participants are closely watching several key earnings releases and economic indicators. Booking Holdings (BKNG) is set to report its earnings after market close today, with options markets pricing in a significant move of ±5.9%. This anticipated volatility underscores the importance of corporate earnings in shaping market sentiment.

Economic Outlook and Market Sentiment

The latest jobless claims data showed a moderate increase in the number of Americans filing for unemployment benefits, suggesting that the labor market remains relatively stable. However, the combination of cautious corporate outlooks, potential trade disruptions, and mixed economic signals has created an atmosphere of uncertainty in the markets.

As we conclude this market recap, it’s clear that investors are navigating a complex landscape of corporate performance, policy shifts, and economic indicators. The coming days will be crucial in determining whether today’s pullback is a temporary setback or the beginning of a more significant market adjustment. Traders and investors alike will be keeping a close eye on further earnings reports, economic data releases, and any developments in trade negotiations to gauge the market’s next move.