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US stocks edged higher on Thursday as investors weighed Walmart's (WMT) tariff-clouded earnings and digested retail sales and wholesale inflation data for further clues to the health of the economy.
The S&P 500 (^GSPC) rose 0.3%, on pace to extend a three-day win streak. The Dow Jones Industrial Average (^DJI) gained 0.3%. The Nasdaq Composite (^IXIC) hovered near the flatline, coming off a sixth upbeat session for tech stocks in a row.
Markets are on watch for the next catalyst now that US-China trade-truce euphoria has faded. On Thursday, in the latest development, President Trump said India has offered to "literally charge us no tariffs" on US goods to help clinch a trade deal.
But corporate statements and economic data continued painting a different reality: In its quarterly results, Walmart said its prices will rise as it can't avoid passing on the high costs of tariffs to customers.
Read more: The latest on Trump's tariffs
Meanwhile, retail sales slowed sharply in April, barely rising in a sharp reversal from American consumers' pre-tariff spending burst in March.
But wholesale inflation unexpectedly slowed last month, even as many of Trump's tariffs began coming into effect. The Producer Price Index fell 0.5% in April and rose at a 2.4% annual clip. The Consumer Price Index (CPI) update this week showed inflation pressures easing to four-year lows.
Federal Reserve policymakers have stressed that they are watching for incoming data to provide a clearer picture of the state of the economy. Fed Chair Jerome Powell on Thursday again warned of broad economic "uncertainty," saying the US economy may be entering a period with more frequent "supply shocks" and volatile inflation.
Meanwhile, oil tumbled after Trump said the US is "close to maybe doing a deal" with Iran over its nuclear program. Brent crude futures (BZ=F), the global benchmark, fell to $64 a barrel, while West Texas Intermediate (CL=F) crude changed hands at $61.
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Despite deals, US tariffs still 'significantly higher' than at start of year, Wall Street warns
Investors cheered President Trump's tariff reductions and deals with trading partners China and the UK, but Wall Street points out that the tariff rates are still relatively high.
"The US effective tariff rate remains significantly higher than it was at the start of the year," Solita Marcelli, chief investment officer Americas for UBS Global Wealth Management, wrote in a client note on Thursday.
Marcelli pointed out the US effective tariff rate — at around 15% — is now six times higher than the 2.5% rate that prevailed in January before President Trump returned to the White House.
That assumes that the rolled-back tariffs during the 90-day pause announced last month can be maintained beyond the deadline.
"As the Trump administration has indicated that the 10% baseline tariff is unlikely to be negotiated lower, these higher tariffs could slow the US economy and push up prices," Marcelli warned.
This morning's commentary from retail giant Walmart (WMT) CEO Doug McMillon highlights this risk.
"We will do our best to keep our prices as low as possible, but given the magnitude of the tariffs, even at the reduced levels announced this week, we aren't able to absorb all the pressure given the reality of narrow retail margins," McMillon said in the company's earnings release. He added on the earnings call that tariffs have already led to price increases in April and May.
The tariff impact could seep back into the stock market.
"While we continue to expect a range of trade agreements to be reached to sustain the tariff rate at roughly the level during the pause period, ongoing uncertainty could trigger further bouts of market volatility," Marcelli said.
Deere stock hits all-time high after better-than-expected profit
Shares of Deere & Company (DE) jumped 5% on Thursday, hitting all-time highs after the tractor and lawn mower maker topped earnings expectations, despite a profit decline of 22% compared to the same period last year.
Investors breathed a sigh of relief as the results came in better than feared. Wall Street has been pointing to signs that the agriculture sector has bottomed after trending lower over the past two years.
Deere cut its net income outlook for the year, citing a "dynamic environment" and "heightened uncertainty."
As of Thursday, the stock was up roughly 23% year to date.
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Yahoo Finance's David Hollerith reports:
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Trending tickers: UnitedHealth, Foot Locker, Walmart, Alibaba
These stocks are grabbing attention for big headlines soon after the opening bell on Thursday. Check out our trending tickers page for more movers.
UnitedHealth (UNH): Shares cratered as much as 17% to hit their lowest level in five years as yet another negative headline hit. The Wall Street Journal reported that the health insurer is facing a DOJ criminal investigation over possible Medicare fraud — a report that UnitedHealth called "deeply irresponsible".
Foot Locker (FL): The footwear chain's stock rocketed up over 80% on news of a $2.4 billion buyout by Dick's Sporting Goods (DKS). Shares in Dick's sank 15% as worries about tariff risks to retailers still in play.
Walmart (WMT): Shares in America's biggest retailer reversed a premarket gain to trade 3% lower early on Thursday as investors digested its first quarter results. A beat on sales was overshadowed by Walmart's warning that it will have to pass the high costs of tariffs on to customers in the form of price rises.
Alibaba (BABA): In another sign of retail sector pressure, Alibaba's US-listed stock dropped over 8% after its quarterly revenue missed estimates. The Chinese e-commerce leader faces a price war at home even as it grapples with tariff uncertainty.
Oil tumbles as Trump hints US-Iran nuclear deal is close
Oil prices slid as much as 3% on Thursday after President Trump indicated the US was getting close to reaching a nuclear deal with Iran, a move which would boost oil supply.
West Texas Intermediate (CL=F) futures dropped to hover just above $61 per barrel. Brent crude (BZ=F), the international benchmark, also tumbled to trade near $64.
“We’ll see what happens,” Trump said in Doha, Qatar, during his Middle East visit on Thursday. “But we’re in very serious negotiations with Iran for long-term peace. And if we do that, it’ll be fantastic.”
Iran, a key player of the Organization of Petroleum Exporting Countries (OPEC), produces more than 3 million barrels of oil per day.
S&P 500 on pace to snap 3-day rally
Stocks fell on Thursday as investors assessed retail sales data and commentary from consumer-facing giant Walmart (WMT).
The S&P 500 (^GSPC) dropped roughly 0.4%, on pace to snap a three-day win streak. The Dow Jones Industrial Average (^DJI) slid 0.5%.
The Nasdaq Composite (^IXIC) dropped about 0.6%.
Energy-related stocks were the biggest decliners after President Trump hinted that a nuclear deal with oil producer Iran was near, which would likely boost the supply of crude.
Retailer Walmart reported mixed earnings and said it would hike prices to navigate President Trump's tariffs.
Meanwhile, retail sales slowed in April as Trump's tariffs weighed on US consumers.
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Yahoo Finance's Jennifer Schonberger reports:
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Retail sales slow sharply in April as pre-tariff spending burst reverses
Retail sales slowed in April as Trump's tariffs weighed on US consumers who pulled forward spending on some key categories into March ahead of these levies.
Headline retail sales rose 0.1% in April, slightly above economists expectations for sales to be flat month-on-month, and well below the 1.7% increase seen in March, according to Census Bureau data.
The control group in Thursday's release, which excludes several volatile categories and factors into the gross domestic product (GDP) reading for the quarter, fell 0.2%; control group sales had risen 0.5% in March. Economists expected a 0.3% increase.
March sales excluding auto and gas rose 0.2%, below consensus estimates for a 0.3% increase and a move lower from the 1.1% increase seen the month prior.
Walmart says it will hike prices due to tariffs
Walmart (WMT) shares rose about 2% premarket after the company reported mixed earnings and said it would hike prices to navigate President Trump's tariffs.
America's largest retailer has been seen as well-positioned to weather tariffs, as around 60% of its sales are in groceries, Yahoo Finance's Brooke DiPalma reported. Its size also means it has leverage to negotiate with suppliers to keep prices low.
However, Walmart announced it would raise some of its prices due to tariffs.
"We will do our best to keep our prices as low as possible," Walmart CEO Doug McMillon said in the release. "But given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins."
Walmart's US same-store sales beat expectations with a 4.5% increase in the first quarter, led by strength in health and wellness and groceries. Here's what the bellwether for retail reported on the top and bottom lines:
Walmart reiterated its conservative financial guidance for the year. It projected net sales to increase between 3% and 4%.
Alibaba stock falls after quarterly revenue miss
Alibaba (BABA) stock dropped 5% before the bell on Thursday after missing quarterly revenue estimates as it adjusts strategies amid economic and trade challenges.
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Good morning. Here's what's happening today.
Foot Locker stock rockets 80% in wake of Dick's $2.4B deal
Dick's Sporting Goods (DKS) has agreed to buy Foot Locker (FL) for roughly $2.4 billion, the companies said on Thursday, confirming an earlier report of the deal by The Wall Street Journal.
Shares in Foot Locker surged over 80% in premarket, taking another leg higher from after-hours gains on the confirmation of The Wall Street Journal's earlier report of the deal.
Big box retailer Dick's is offering $24 apiece for shares of its smaller footwear rival, a premium of 86% on the stock's closing price on Wednesday, per Reuters.
Dick's stock dropped almost 9% before the bell as investors assessed the move, which comes as President Trump's tariffs pose supply risks and uncertainty for retailers.
The Associated Press reported:
UnitedHealth stock slides as report of criminal investigation adds to woes
Shares of beleaguered UnitedHealth (UNH) sank almost 7% in premarket trading after a report that US prosecutors are probing the company over possible Medicare fraud.
The Department of Justice is carrying out a criminal investigation into the health insurer, The Wall Street Journal reported on Wednesday.
UnitedHealth told Reuters that it has not been notified by the DOJ about the reported investigation. The outlet reports:
Cisco stock jumps as AI demand lifts annual forecast
Cisco Systems (CSCO) stock rose 4% before the bell on Thursday after its finance chief Scott Herren announced retirement from the company in July, and raised its annual results forecast.
Reuters reports:
Japanese investors continue mammoth run of foreign stock spend
Japanese investors have logged eight consecutive weeks of heavy investment in foreign stocks. US tariff fears failing to stop high Yen spend, with momentum in trade talks only ramping up investment.
Reuters reports:
Read more here.
Crude oil drops over $1 as stockpiles rise
US crude oil futures dropped over $1 as a rise in US stockpiles led to oversupply fears.
Brent Crude (BZ=F) sunk by $1.32 or 2% by late evening on Wednesday.
Reuters reports:
