Walmart shares tumbled 9.2 percent after the world’s largest traditional retailer missed Wall Street expectations for quarterly comparable sales as rising gasoline prices had shoppers reining in spending.
Rival retailers such as Costco, Dollar Tree and Albertsons followed Walmart lower with losses between 1 percent and 2.6 percent.
The increase in US crude oil above US$87 compounded concerns about the health of the US consumer, according to Mona Mahajan, head of investment strategy at Edward Jones. She noted that investors were already anxious after recent weaker-than-expected retail sales and labour market data for July.
“There is some question about how resilient the consumer can be with ongoing elevated gas prices and inflationary pressures,” Mahajan said. The strategist also highlighted pressure from rising bond yields on equities.
Wall Street indexes had risen on Wednesday after the US Treasury Department said it would spend more than double the expected amount on buying back bonds in a bid to slow a recent surge in yields.
On Thursday, however, stocks declined as yields advanced again. Yields on the 30-year and 10-year bonds pared gains briefly after US Treasury Secretary Scott Bessent said he may again increase the volume of Treasury bonds the government will repurchase. But yields resumed their upward trend.
“There are a couple of headwinds that the markets woke up to today,” said Mahajan. “One was a resumption in the increase in bond yields across the curve that came despite yesterday’s Treasury move… it reversed very quickly, within 24 hours.”
The Dow Jones Industrial Average fell 703 points, or 1.3 percent, to 52,759, the S&P 500 lost 66 points, or 0.9 percent, to 7,641 and the Nasdaq Composite lost 263 points, or 1 percent, to 26,067. (Reuters)