Markets Watch Powell for Rate Clues While Walmart and Retail Sales Add to the Mix

All Eyes on Powell: Will the Fed Chair Deliver the Catalyst Traders Need?

Traders are bracing for potential market-moving commentary from Federal Reserve Chair Jerome Powell on Thursday, as the S&P 500 struggles to regain momentum.

While Walmart earnings and April retail sales offer insight into consumer strength, Powell’s remarks are expected to take center stage. His comments on the Fed’s policy review may not deliver immediate clarity on rate cuts but could still carry long-term implications for rates, inflation management, and broader risk sentiment.

Federal Reserve Policy Framework Under the Microscope

Following three straight hold decisions on interest rates, Powell is expected to expand on the Fed’s internal review of its monetary policy framework. Instead of offering timing signals for cuts, he may outline subtle but important changes to how the Fed interprets its dual mandate.

A shift toward a more symmetric inflation target and potential improvements in the Fed’s Summary of Economic Projections (SEP) could influence how markets interpret future inflation trends—even without hard policy signals.

Political pressure is also building, with Donald Trump openly calling for rate cuts. While Powell is unlikely to respond directly, his tone and focus will be carefully dissected for signs of how external pressures may or may not affect the Fed’s decision-making.

Walmart Earnings in Focus: Can the Retail Giant Maintain Resilience?

Walmart’s Q1 report is a key test for the U.S. consumer narrative. Analysts expect earnings of $0.58 per share, down 3.3% year-over-year, on $164.5 billion in revenue, up 2.9%.

With the stock up 10% year-to-date, expectations are cautious. Oppenheimer’s Rupesh Parikh notes downside risk tied to higher costs and a weaker product mix, but says Walmart remains well-positioned for any consumer slowdown.

Importantly, Walmart has reaffirmed full-year guidance, signaling confidence despite tariff risks tied to Trump’s trade policy. If guidance holds, it may reinforce the view that U.S. consumption remains robust even under policy uncertainty.

Retail Sales Data Could Support a Soft-Landing Narrative

April retail sales, expected to show a flat monthly print, follow a surprisingly strong 1.4% gain in March. Early third-party data suggest consumer spending likely remained resilient, which could dampen recession talk and support risk assets. A better-than-expected figure would weaken the case for near-term easing, but bolster confidence in earnings and consumer-related equities.

Market Forecast: Cautious Bullish Tilt Hinges on Powell

Short-term market direction may depend less on Walmart and retail sales and more on Powell’s tone. If he downplays risks and reinforces economic stability, equities could find a floor.

Without rate cut hints, a temporary pullback is possible. However, resilient consumer data and unchanged corporate guidance suggest a cautiously bullish bias for now.

More Information in our Economic Calendar.