US stocks retreated on Thursday as investors digested Walmart’s cautious fiscal outlook and weighed the potential impact of President Trump’s planned tariffs and policy shifts. The Dow Jones Industrial Average (^DJI) led the decline, falling roughly 450 points, or about 1%, while the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) each dropped 0.5%. The pullback came after the S&P 500 notched its second consecutive record close on Wednesday, highlighting the market’s sensitivity to emerging headwinds.
Walmart’s Warning Weighs on Markets
Walmart (WMT), a bellwether for consumer spending, reported better-than-expected quarterly profits but issued a cautious outlook for its 2026 fiscal year. The retail giant’s shares tumbled more than 6%, dragging down the Dow and signaling concerns about the broader economic environment. Walmart’s guidance raised questions about the resilience of corporate earnings amid rising costs and shifting consumer behavior.
The decline in Walmart shares was compounded by sharp drops in financial stocks, with Goldman Sachs (GS) and JPMorgan Chase (JPM) each falling roughly 4%. These losses underscored growing unease about the financial sector’s ability to navigate an uncertain economic landscape.
Trump’s Tariffs and Policy Shifts Add to Uncertainty
Investors are also grappling with the potential fallout from President Trump’s proposed tariffs and policy changes. Trump’s planned 8% cut to Pentagon spending sent shockwaves through the defense sector, with Palantir Technologies (PLTR) shares dropping about 5%. The move has raised concerns about the broader impact on defense contractors and related industries.
Meanwhile, Trump’s tariff policies continue to weigh on corporate America. General Motors (GM) is reportedly considering significant changes to its business operations in response to the tariffs, highlighting the challenges companies face in adapting to the new trade environment.
Geopolitical Tensions and Safe-Haven Demand
Geopolitical tensions further rattled markets, as a clash between Trump and Ukraine’s president reignited fears of instability. The uncertainty pushed investors toward safe-haven assets, with gold (GC=F) hitting a fresh record high. The precious metal’s rally reflects a broader shift away from riskier assets as market participants brace for potential volatility.
Key Takeaways for Investors
The market’s reaction to Walmart’s outlook and Trump’s policy proposals underscores the fragility of investor sentiment. Key factors to watch include:
- Corporate Earnings: Walmart’s cautious guidance may signal challenges for other retailers and consumer-facing companies.
- Trade Policy: The impact of Trump’s tariffs on industries like automotive and defense could weigh on economic growth.
- Geopolitical Risks: Escalating tensions between the US and other nations may continue to drive demand for safe-haven assets like gold.
Looking Ahead
As investors assess the implications of these developments, market volatility is likely to persist. The interplay between corporate earnings, trade policy, and geopolitical risks will remain a focal point in the weeks ahead. For now, the pullback in US stocks serves as a reminder of the complex and interconnected forces shaping the global economy.
