Wall Street Slips as Investors React to Walmart’s Earnings and Economic Data

February 20, 2025 – 10:35 AM ET

U.S. stock markets opened lower on Thursday as investors reacted to Walmart’s (NYSE: WMT) earnings report, which fell short of expectations. This pullback comes just a day after the S&P 500 (SP500) hit another record high, highlighting the market’s ongoing volatility as it navigates corporate earnings and macroeconomic developments.

Market Performance

As of early trading:

• The S&P 500 (SP500) was down 0.6%.
• The Nasdaq Composite (COMP:IND) declined 0.7%.
• The Dow Jones Industrial Average (DJI) dropped 0.9%.

Bond Market & Treasury Yields

Meanwhile, the Treasury market saw modest movement:

• The 10-year Treasury yield (US10Y) slipped 2 basis points to 4.51%.
• The 2-year Treasury yield (US2Y) declined 2 basis points to 4.25%.

These movements suggest that investors are keeping a close eye on interest rate expectations, particularly as Federal Reserve policy discussions continue to shape market sentiment.

Corporate Earnings: Walmart & Palantir Under Pressure

Corporate earnings remained in focus, with Walmart (WMT) leading the market decline. The retail giant’s stock dropped 5.7% after its profit and sales outlook missed analysts’ estimates. The company cited stiff competition and shifting consumer spending patterns as key challenges impacting its guidance.

Palantir Technologies (PLTR) also suffered a sharp decline, tumbling 11.3% after a leaked Hegseth memo called for significant spending cuts. The news heightened concerns about potential operational slowdowns at the data analytics firm, leading to a sharp selloff in its shares.

Economic Data: Mixed Signals Raise Concerns

On the macroeconomic front, several key economic indicators were released:

• Initial jobless claims rose more than expected last week, signaling a potential softening in the labor market. However, continuing claims came in line with forecasts, indicating that those unemployed are still finding new jobs at a steady rate.
• The Philadelphia Fed Manufacturing Index weakened more than expected in February, suggesting a slowdown in industrial activity.
• The Leading Economic Index (LEI) slipped 0.3% to 101.5 in January, which was weaker than the 0.0% consensus forecast. This decline adds to concerns about the overall economic outlook, as the index is considered a forward-looking gauge of U.S. economic health.

Market Recap: S&P 500’s Record High & Federal Reserve Outlook

Despite today’s market weakness, Wall Street’s major indices managed to reach new heights on Wednesday, with the S&P 500 closing at a record high. Investors were digesting the Federal Reserve’s latest meeting minutes and the impact of President Donald Trump’s recent tariff actions.

According to UBS Chief Economist Paul Donovan, the Fed’s January meeting minutes painted a cautious outlook on monetary policy. He noted that investor nervousness over the economic consequences of Trump’s policies was evident, with concerns about inflation playing a key role in the discussion.

Similarly, Deutsche Bank strategist Henry Allen highlighted the market’s divergent performance, pointing out that while U.S. stocks continued to rally, global markets struggled due to Trump’s new tariff threats and geopolitical tensions involving Ukraine.

Looking Ahead: Market Uncertainty Persists

As investors assess corporate earnings, economic data, and political developments, volatility is expected to remain a key theme in the coming weeks. The market’s resilience has been tested, with the S&P 500 continuing to push higher despite external headwinds. However, today’s pullback suggests that concerns over corporate performance and macroeconomic conditions may still weigh on investor sentiment in the near term.

With earnings season in full swing and further economic reports on the horizon, investors will be watching closely for signs of strength—or weakness—across key sectors.