A rebound in US government bond yields sent stocks falling again on Thursday, with retail giant Walmart's quarterly sales miss weighing heavily on investor sentiment, according to a Reuters report.
Walmart shares fell 8.6% after quarterly comparable sales came in below Wall Street estimates as higher gas prices prompted consumers to curb spending. The stock dragged the S&P 500 consumer staples index down 1.6%, making it the session’s worst-performing sector.
“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.
Bond and equity markets have faced pressure this week from rising oil prices linked to the conflict in Iran and concerns about growing government debt. The US 30-year Treasury yield reached a near-two-decade high before retreating sharply on Wednesday, following the US Treasury's unveiling of measures to support longer-duration bonds.
Relief from the Treasury’s intervention proved short-lived, however, as the 30-year yield rose about 3 basis points to 5.239%. The benchmark 10-year yield also edged higher and was last at 4.698%.
“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,” Joe Saluzzi, co-manager of trading at Themis Trading, told Reuters.
“As the yields start to continue to move up, equity investors will continue to have a problem with it.”
The Dow Jones Industrial Average dropped 319.61 points, or 0.60%, to 53,143.44. The S&P 500 declined 11.46 points, or 0.15%, to 7,696.52, while the Nasdaq Composite lost 77.02 points, or 0.29%, to 26,254.38.
The S&P 500 consumer discretionary sector was the largest drag on the market, falling 1.3% as Amazon and Tesla declined. Advances in Nvidia and Apple helped contain the broader losses.
Oil prices, meanwhile, climbed 2.3%, extending their rally into a fifth consecutive session as US-Iran peace talks stalled and supply disruptions persisted across the Middle East.
Recent macroeconomic developments have pulled the S&P 500 and the Dow away from the record highs reached earlier this month, when results from companies across several sectors indicated that corporate America remained strong.
Separate data showed that the number of Americans applying for unemployment benefits declined last week, suggesting the labor market continued to hold steady.
Investors awaited remarks from St. Louis Fed President Alberto Musalem later in the day.
Minutes from the US Federal Reserve’s July meeting, released on Wednesday, showed growing concern about inflation within the central bank, with “several” policymakers prepared to raise interest rates.
Cryptocurrency-linked stocks rallied a day after US President Donald Trump urged Congress to approve a crypto bill. Bitcoin holder Strategy gained 6.6%, while cryptocurrency exchange Coinbase Global advanced 5.6%.
Moderna dropped more than 18%, a day after the biotechnology company surged nearly 177%.
Deere rose 3.8% after the world’s largest agricultural-equipment maker raised its full-year net income forecast.
Declining stocks outnumbered advancing issues by a 1.83-to-1 ratio on the NYSE and a 1.68-to-1 ratio on the Nasdaq. The S&P 500 recorded seven new 52-week highs and one new low, while the Nasdaq Composite registered 28 new highs and 29 new lows.
(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)
