Market Recap: Wall Street Retreats as Walmart’s Outlook Dampens Sentiment

Major Indexes Pull Back Amid Retail Giant’s Cautious Forecast

On Thursday, February 20, 2025, U.S. stock markets experienced a notable pullback, primarily driven by Walmart’s disappointing outlook and renewed concerns over potential tariffs. The day’s trading session saw major indexes retreat from recent highs as investors reassessed the economic landscape.

S&P 500, Dow Jones, and Nasdaq Performance

The Dow Jones Industrial Average (^DJI) bore the brunt of the sell-off, plummeting more than 600 points or approximately 1.35% to close at 44,025.23. The S&P 500 (^GSPC) also faced downward pressure, shedding 0.70% to end the day at 6,101.39, while the tech-heavy Nasdaq Composite (^IXIC) declined by 0.72% to 19,912.29.

Walmart’s Forecast Shakes Retail Sector

The day’s biggest market mover was undoubtedly Walmart (WMT), which saw its shares tumble 6.4% in premarket trading. The retail giant’s fiscal 2026 earnings guidance fell short of analyst expectations, projecting earnings per share between $2.50 and $2.60. This cautious outlook not only impacted Walmart but sent ripples through the entire retail sector, with other major retailers like Target (TGT), Costco Wholesale (COST), and Dollar Tree (DLTR) experiencing declines between 1.2% and 1.8%.

Upcoming Earnings and Market Events

Investors are closely watching several high-profile earnings releases scheduled for the coming days. Notable companies reporting include:

1. Newmont Mining (NEM): Expected after market close with an implied move of ±6.14%
2. Booking Holdings (BKNG): Reporting after hours with an anticipated ±5.37% move
3. Southern Co (SO): Pre-market release with a projected ±2.43% shift
4. Alibaba (BABA): Already reported, beating expectations with a 6.88% implied move

These earnings reports are likely to provide further insights into various sectors and could potentially influence market direction in the short term.

Major Stock Movements and News

Several stocks made significant moves during the trading session:

– Alibaba Group Holding Limited (BABA): Shares surged over 11% after reporting quarterly results that exceeded analysts’ expectations. The Chinese e-commerce giant posted net income of 48.945 billion yuan on revenue of 280.154 billion yuan.

– Shake Shack (SHAK): The fast-food chain saw its shares jump 10.8% following stronger-than-expected quarterly earnings and robust revenue growth of 14.8% year-over-year.

– Palantir Technologies (PLTR): The data processing stock continued its decline, falling 3.8% in premarket trading. This follows a 10% drop in the previous session amid concerns over potential defense budget cuts.

– Carvana (CVNA): The online used car retailer tumbled around 8% after reporting mixed fourth-quarter results, with gross profit per unit falling short of consensus estimates.

Economic Outlook and Geopolitical Factors

Market sentiment was further dampened by renewed concerns over potential tariffs. President Trump’s recent announcements regarding fresh tariffs on imports, including lumber and forest products, have added to investor unease. Additionally, the market is digesting the implications of delayed tariffs on goods from Mexico and non-energy imports from Canada.

Looking Ahead

As we move forward, investors will be closely monitoring upcoming economic data releases and any developments in trade negotiations. The market’s reaction to Walmart’s forecast serves as a reminder of the ongoing challenges faced by retailers in the current economic environment.

With several key earnings reports on the horizon and continued geopolitical uncertainties, market volatility may persist in the short term. Investors are advised to stay informed and maintain a balanced approach to their portfolios in light of these market dynamics.