Wall Street falls as Walmart shares plunge, US bond yields surge and Iran conflict drives oil prices higher
US stocks have opened lower as investors digested the minutes of a Federal Reserve meeting and monitored government bond yields.
The main US stock indices have fallen as rebounding government bond yields hurt sentiment, while retail bellwether Walmart faced sharp declines after a quarterly sales miss.
Walmart lost 8.6 per cent after missing Wall Street expectations for quarterly comparable sales as shoppers pulled back on spending in the face of rising petrol prices.
It dragged on the S&P 500 consumer staples index, the biggest sectoral loser, which was down 1.6 per cent.
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By continuing you agree to our Terms and Privacy Policy.“Investor sentiment wavered after the company held to its conservative guidance last quarter, and the slightly raised outlook may not be sufficient to restore confidence,” said Sky Canaves, principal analyst at Emarketer.
Concerns over elevated oil prices stemming from the Iran conflict and increasing government debt battered bond and stock markets this week.
The US 30-year Treasury yield rose to a near-two-decade high before pulling back sharply on Wednesday, after the US Treasury announced support measures for long-duration bonds.
However, relief from the Treasury intervention appeared short-lived, with the 30-year yield adding about 3 basis points to 5.239 per cent.
On the benchmark 10-year bond, it inched up as well and was last at 4.698 per cent.
“There really wasn’t that big of a deal what he (Bessent) said... (the market is) probably looking at it now, going like that’s not really going to change or move the needle much,” said Joe Saluzzi, co-manager of trading at Themis Trading.
“As the yields start to continue to move up, equity investors will continue to have a problem with it.”
In early trading on Thursday, the Dow Jones Industrial Average fell 319.61 points, or 0.60 per cent, to 53,143.44, the S&P 500 was down 11.46 points, or 0.15 per cent, to 7,696.52, and the Nasdaq Composite lost 77.02 points, or 0.29 per cent, to 26,254.38.
The S&P 500 consumer discretionary sector was the biggest weight and was off 1.3 per cent, dragged by losses in Amazon and Tesla.
Gains in Nvidia and Apple helped limit declines.
Meanwhile, oil prices rose 2.3 per cent, extending gains for the fifth consecutive session on stalled US-Iran peace talks and Middle East supply disruptions.
Recent macro developments have knocked the S&P 500 and the Dow off record highs clocked earlier this month as results from companies in several sectors painted a strong picture.
Separately, data showed the number of people in the US filing claims for unemployment benefits slipped last week, suggesting the labour market remains stable.
Investors will watch for comments from St Louis Fed president Alberto Musalem later in the day.
Minutes of the US Federal Reserve’s July meeting, released on Wednesday, showed inflation concerns deepening at the central bank, with “several” policymakers ready to raise interest rates.
Among others, cryptocurrency-related companies rallied a day after US President Donald Trump called on Congress to pass a crypto bill.
Bitcoin hoarder Strategy added 6.6 per cent and exchange operator Coinbase Global rose 5.6 per cent.
Biotech company Moderna dropped more than 18 per cent a day after surging nearly 177 per cent.
Deere gained 3.8 per cent after the world’s largest farm-equipment manufacturer raised its full-year net income forecast.
Declining issues outnumbered advancers by a 1.83-to-1 ratio on the NYSE and by a 1.68-to-1 ratio on the Nasdaq.
The S&P 500 posted seven new 52-week highs and one new low, while the Nasdaq Composite recorded 28 new highs and 29 new lows.
