NEW YORK: Wall Street’s main indexes slipped on Thursday, as cautious investors awaited clues on monetary policy from a Federal Reserve conference in Jackson Hole, while big-box retailer Walmart’s quarterly results did little to boost sentiment.
Walmart raised its fiscal year sales and profit, driven by strong demand from shoppers across all income levels, but missed quarterly profit expectations and flagged higher costs from tariffs.
Shares of the retailer fell 3.4% and pressured the consumer staples sector, which declined 0.9%. The spotlight was on reports from retailers, including Target and Home Depot, this week as investors tried to gauge the impact of US tariffs on consumer spending. “There’s a bit of a mixed picture within the consumer space and there’s uncertainty in the economy - whether that’s the job market or whether that’s prices (increasing) from a tariff pass through,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management.
A labor market report on Thursday showed signs of a slowdown, while a private report indicated business activity picked up pace in August, reflecting a complex environment for the central bank that has to deliver its verdict on rate cuts next month.
All eyes are now on the Fed’s annual symposium, where Chair Jerome Powell is scheduled to speak on Friday at 10 a.m. ET. Traders will closely monitor Powell’s speech for any clues on interest rate cuts in September following recent job market weakness.
“Investors are looking for assurance from Powell that a rate cut is likely at the September meeting, in order to help prevent any further weakening of the labor market,” said Rick Gardner, chief investment officer at RGA Investments.
Multiple policymakers, including Cleveland Fed President Beth Hammack, Atlanta President Raphael Bostic and Kansas City Fed President Jeffrey Schmid, have struck a cautious tone and acknowledged the need to stay data dependent.
Traders have pared down their expectations for a 25-basis-point interest rate cut in September to 79% from 99.9% last week, according to data compiled by LSEG.
At 11:50 a.m. ET the Dow Jones Industrial Average fell 74.70 points, or 0.17%, to 44,863.61, the S&P 500 lost 12.73 points, or 0.20%, to 6,383.05 and the Nasdaq Composite lost 42.87 points, or 0.20%, to 21,129.99.
A selloff in technology stocks earlier this week appeared to subside, with technology-related stocks such as Meta, Amazon.com and Advanced Micro Devices marginally lower.
The selloff signaled investor fears that the equities, which have soared since April lows, are now overvalued, while Washington’s growing interference in the sector has also raised alarms.
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