The stock market closed lower on Thursday after Walmart’s weaker-than-expected sales outlook sparked concerns about consumer spending and overall economic stability.
By the end of the trading session at 4:00 p.m. ET (21:00 GMT), the S&P 500 dropped by 0.4%, the Nasdaq Composite declined by 0.5%, and the Dow Jones Industrial Average slid by 450 points, equivalent to a 1% loss.
Walmart’s Forecast Weighs on Investor Sentiment
Walmart (NYSE: WMT) saw its stock market tumble by over 6% after the retail giant projected slower-than-expected sales growth for its 2026 fiscal year. The forecast, which came in below analyst expectations, suggested that inflation-wary consumers might be pulling back on spending.
As one of the most widely recognized retailers in the U.S., Walmart is often seen as a key indicator of consumer behavior. The company stated that it anticipates annual consolidated net sales growth between 3% and 4%, falling short of the 4% increase analysts had projected, based on data from LSEG cited by Reuters.
Despite the stock market reaction, Truist Securities viewed the dip in Walmart’s stock market as a potential buying opportunity, citing its continued expansion and improved profit margins. Nonetheless, Walmart’s cautious outlook also affected other major retailers, with shares of Target Corporation (NYSE: TGT) and Costco Wholesale Corp (NASDAQ: COST) also trading lower.
Alibaba Surges, While Carvana and Birkenstock Face Setbacks
On the other hand, Alibaba (NYSE: BABA) saw its U.S.-listed shares climb over 8% following better-than-expected third-quarter revenue, reflecting strong performance in the Chinese e-commerce sector.
Meanwhile, Carvana (NYSE: CVNA) experienced an 11% decline as investors reacted to a lack of clarity regarding the company’s 2025 outlook, despite its solid fourth-quarter results.
Birkenstock (NYSE: BIRK) also faced a slight downturn, slipping by 1% after the footwear brand maintained its annual margin forecast despite seeing a holiday-season sales boost.
Federal Reserve Officials Signal Continued Caution
In policy-related developments, St. Louis Federal Reserve President Alberto Musalem reiterated on Thursday that while inflation appears to be trending toward the Fed’s 2% target, he supports holding off on rate cuts until there is more certainty about inflation’s trajectory.
His comments echoed similar sentiments from other Federal Reserve officials who have emphasized the need for clear evidence of disinflation before making adjustments. However, Atlanta Fed President Raphael Bostic adopted a slightly more dovish stance on Wednesday, predicting two rate cuts in 2025 while acknowledging the growing uncertainty in economic conditions.
With these mixed signals and ongoing concerns about consumer spending, investors remain watchful as stock market volatility continues.
