Dow Jones Drops 150 Points: Walmart’s Weak Outlook and Fed Minutes Rattle Markets

Fed Inflation Concerns and Walmart Slump Weigh on U.S. Markets

U.S. stocks pulled back on Thursday, with the Dow Jones Industrial Average dropping over 100 points and the S&P 500 retreating from its record high as traders digested Federal Reserve minutes highlighting inflation risks and disappointing guidance from Walmart. The Nasdaq Composite also lost ground, as investors balanced inflation worries with mixed corporate earnings.

How Did Major Indexes Perform?

The Dow fell 0.35%, dragged down by a steep drop in Walmart shares. The S&P 500 dipped 0.27%, reversing Wednesday’s record-setting gains, while the Nasdaq Composite shed 0.2%. Market sentiment took a hit after the Fed’s January meeting minutes revealed concerns over persistent inflation and potential disruptions from President Donald Trump’s proposed tariffs and immigration policies.

What Drove Walmart’s Sharp Decline?

Walmart shares tumbled more than 7% following weak guidance for fiscal 2026. While the retail giant reported fourth-quarter earnings that beat estimates, it forecast earnings per share of $2.50 to $2.60, below Wall Street expectations. The company warned of potential impacts from delayed tariffs on Mexico and Canada, dampening investor sentiment.

Which Stocks and Sectors Stood Out?

Retail stocks broadly struggled, with Walmart leading the decline. However, Shake Shack surged 10.8% after posting strong quarterly earnings and expanding its footprint with 28 new locations. Tech shares saw mixed performances; Alibaba jumped over 11% on earnings that exceeded forecasts, while Carvana fell 8% due to lower-than-expected retail gross profit per unit.

What Did the Fed Minutes Reveal?

The Federal Open Market Committee’s (FOMC) minutes showed policymakers are cautious about inflation, citing risks from Trump’s trade and immigration strategies. While the Fed kept interest rates steady between 4.25% and 4.5%, officials emphasized the need for clear disinflation signals before any further rate cuts. The central bank also debated slowing its quantitative tightening program, with liquidity concerns emerging as a key issue.

What Should Traders Watch Next?

With inflation concerns persisting, traders should monitor economic data closely, including upcoming inflation and employment reports. The potential for new tariffs and the Fed’s stance on quantitative tightening could add volatility to markets. Safe-haven assets like gold may gain traction if inflation risks escalate, while defensive sectors could offer relative stability.

Overall, traders should remain cautious, balancing risk exposure with strategic defensive plays as market conditions evolve.

More Information in our Economic Calendar.