New York, February 21, 2025 – U.S. stock markets saw mixed performance on Friday as major indices struggled to regain momentum following Thursday’s sell-off, largely driven by a disappointing financial outlook from retail giant Walmart (WMT).
Market Snapshot
The S&P 500 (SP500) dipped 0.5%, while the Nasdaq Composite (COMP:IND) was down 0.6%. The Dow Jones Industrial Average (DJI) faced the steepest decline, tumbling 0.8%, weighed down by UnitedHealth’s (UNH) sharp 8.3% drop.
UnitedHealth’s losses came after The Wall Street Journal reported that the U.S. Department of Justice had launched an investigation into the company’s business practices, adding fresh uncertainty to the healthcare sector.
Walmart’s Weak Outlook Rattles Investors
The retail sector took a hit as Walmart’s weaker-than-expected earnings guidance fueled concerns about consumer spending. The retail giant’s cautious financial outlook coincided with a soft retail sales report last week, exacerbating fears over the economy’s resilience.
Jim Reid of Deutsche Bank noted, “We saw a moderate risk-off move yesterday, with the S&P 500 falling back from its all-time high. Walmart’s weaker guidance added to concerns about the health of the consumer, particularly following a disappointing retail sales print.”
Economic Indicators Paint a Mixed Picture
Macroeconomic data added to the uncertain sentiment in the market. The latest S&P Composite PMI reading for February stood at 51.6, down from the previous 52.7, indicating slowing business activity. Meanwhile, the service index came in at 49.7, a notable drop from 53.0, signaling a contraction in service sector growth.
Additionally, the housing market showed signs of weakness as existing home sales in January fell by 4.9%, reaching 4.08 million, below analysts’ expectations of 4.13 million. This decline highlights the ongoing challenges faced by prospective homebuyers amid high mortgage rates and affordability concerns.
Bond Market Reaction
The bond market reflected investor caution, with the 10-year U.S. Treasury yield (US10Y) falling by 5 basis points to 4.46%, while the 2-year yield (US2Y) declined by 3 basis points to 4.23%. The movement suggests investors are seeking safer assets amid growing uncertainty in the equity markets.
Looking Ahead
As Wall Street navigates a volatile trading week, investors will closely watch upcoming economic reports and corporate earnings for further clues on market direction. With lingering concerns over consumer spending and regulatory headwinds in the healthcare sector, markets may remain under pressure in the short term.
Stay tuned for more updates as Wall Street reacts to unfolding economic developments and corporate earnings reports.
