US markets pulled back on Thursday as investors reacted to disappointing guidance from Walmart, US stocks tumbled on Thursday, retreating from recent highs as disappointing earnings guidance from retail giant Walmart sparked concerns over consumer spending and economic resilience. The Dow Jones Industrial Average plunged more than 400 points, while the S&P 500 and Nasdaq also edged lower amid broad-based selling. Investors grew wary after The Conference Board’s Leading Economic Index signalled an unexpected contraction, adding to fears of a potential slowdown. Meanwhile, bank stocks struggled as Treasury yields dipped, and geopolitical uncertainties compounded market caution. Despite the pullback, gold extended its record-setting rally, while oil prices continued to rise for a third straight session, driven by supply concerns and a US fuel stock drawdown.

Key Takeaways:

  • S&P 500 Pulls Back from Record Highs: The S&P 500 declined 0.43% to close at 6,117.52, reversing gains from earlier in the week when it reached all-time highs. Investor sentiment weakened following a lacklustre forecast from Walmart, sparking worries about consumer spending.
  • Dow Drops Over 400 Points as Retail Weakness: The Dow Jones Industrial Average plunged 450.94 points, or 1.01%, to finish at 44,176.65, marking its steepest decline in weeks. The drop was led by Walmart, which fell 6.5% after issuing disappointing fiscal 2026 guidance. Other major retailers, including Target and Costco, also saw declines of about 2%.
  • Nasdaq Slides as Tech Stocks Struggle: The Nasdaq Composite fell 0.47%, closing at 19,962.36, as investors took profits following strong gains in recent sessions. Retail investor-favourite Palantir slumped 5.2%, extending its weekly losses to over 10%, after reports suggested potential budget cuts in the defence sector. 
  • Treasury Yields Fall Amid Economic Uncertainty: US Treasury yields edged lower as investors digested weaker economic data and President Trump’s latest tariff threats. The 10-year Treasury yield declined by 3.2 basis points to 4.503%, while the 2-year yield slipped less than 1 basis point to 4.272%. The drop in yields reflected increased caution as jobless claims came in higher than expected and concerns mounted over potential economic weakness.
  • European Markets Struggle as Retail and Economic Worries Persist: The Stoxx 600 ended the session 0.18% lower as earnings season continued to drive volatility. The FTSE 100 dropped 49.56 points, or 0.57%, closing at 8,662.97, pressured by weakness in consumer stocks. France’s CAC 40 gained 0.2% to 8,123, rebounding from a 1.2% drop in the previous session, while Germany’s DAX slid 0.5% to 22,340.6. Italy’s FTSE MIB closed 0.3% lower at 38,249, mirroring declines across most major European indices. Schneider Electric shares climbed 3% after the company posted record annual sales and profits, while Carrefour and Aegean Airlines slumped over 9%.
  • Asian Markets Drop as Trump Tariff Threats and Fed Rate Concerns Hit Sentiment: Markets across the Asia-Pacific region closed lower on Thursday, pressured by fears of new US tariffs and worries that the Federal Reserve may keep interest rates higher for longer. Japan’s Nikkei 225 fell 1.24% to 38,678.04, extending its recent losses, while the broader Topix index declined 1.18% to 2,734.60. In South Korea, the Kospi slid 0.65% to 2,654.06, while the Kosdaq tumbled 1.28% to 768.27. China’s CSI 300 dipped 0.29% to 3,928.90, while the Hang Seng Index fell 1.60% to 22,576.98. Australia’s S&P/ASX 200 dropped 1.15% to 8,322.80, marking its fourth consecutive session of losses despite a January jobs report showing 44,000 new positions and a jobless rate climbing to 4.1%.
  • US Jobless Claims Rise More Than Expected, Raising Economic Concerns: Initial jobless claims increased to 219,000 for the week ending February 15, slightly above the consensus estimate of 215,000. This marked a 5,000 increase from the previous week, suggesting some softening in the labour market. Continuing claims also rose, reaching 1.87 million—an increase of 24,000 from the prior reading.
  • Oil Prices Extend Gains as Supply Risks Persist: Crude oil prices climbed for a third consecutive session, supported by a drawdown in US fuel inventories and concerns over potential disruptions in Russian supply. Brent crude rose 44 cents, or 0.58%, to settle at $76.48 per barrel, while West Texas Intermediate (WTI) crude for March delivery advanced 32 cents, or 0.44%, to $72.57.

FX Today:

  • EUR/USD Strengthens as It Nears 1.0500 Resistance: The Euro gained ground against the US dollar on Thursday, rising 0.72% to close at 1.0497. The pair approached the key psychological level of 1.0500 as the dollar weakened following softer-than-expected US jobless claims data and concerns over the Federal Reserve’s monetary policy outlook. Technical indicators point to strong support at 1.0389 (50-day SMA), while the next resistance stands at 1.0559 (100-day SMA). A sustained move above this level could push the pair toward 1.0741 (200-day SMA). However, if the pair fails to clear 1.0500, a consolidation phase may follow, with downside support at 1.0450.
  • GBP/USD Climbs Above 1.2650 on Weak US Jobs Data: The British pound advanced 0.65% against the US dollar, closing at 1.2667, as investors reacted to weaker-than-expected US jobless claims figures. The currency pair broke through the 1.2650 resistance level, reaching the 100-day SMA at 1.2667. The 50-day SMA at 1.2465 remains a key support level, reinforcing the pair’s bullish momentum. If GBP/USD sustains its move above 1.2667, further upside potential could target 1.2789 (200-day SMA). However, failure to hold above 1.2660 could see the pair retreat toward 1.2550.
  • USD/CAD Falls Below 1.4200 as Canadian Dollar Strengthens: The US dollar weakened against the Canadian dollar on Thursday, with USD/CAD declining 0.40% to 1.4172. The drop came after stronger-than-expected Canadian Producer Price Index (PPI) data and mixed housing market figures. The pair remains under pressure after failing to hold above the 50-day SMA at 1.4338. The next key support is at 1.4117 (100-day SMA), and a break below this level could push USD/CAD toward 1.3886 (200-day SMA). However, if the pair rebounds above 1.4200, resistance is seen at 1.4338, though the overall trend remains bearish.
  • USD/JPY Breaks Below 150.00 as Bears Take Control: The Japanese yen strengthened against the US dollar on Thursday, pushing USD/JPY down 1.17% to 149.69. The pair broke below the critical 150.00 support level, marking a significant shift in momentum. The 200-day SMA at 152.59 now acts as strong resistance, while the 100-day SMA at 153.36 remains a key technical barrier. If USD/JPY stays below 150.00, further losses toward 148.50 could be expected. However, a recovery above 150.50 could lead to a short-term rebound, with resistance at 151.50.
  • Gold Prices Soar to Fresh Record Highs on Safe-Haven Demand: Gold continued its bullish run, reaching a new all-time high of $2,947.11 per ounce before settling at $2,937, up 0.13% for the session. The yellow metal has now gained 12% year-to-date after a 27% rally in 2024, driven by ongoing economic uncertainties and increased safe-haven demand following renewed trade tensions and weaker US economic data. Gold remains well-supported above the 50-day SMA at $2,737, reinforcing the strong uptrend. The key resistance level at $2,955 remains a crucial barrier, and a break above this could push prices toward the psychological $3,000 mark. Immediate support lies at $2,920, with stronger downside protection at the 50-day SMA. If gold dips below $2,900, profit-taking could accelerate, but the overall trend remains firmly bullish.

Market Movers:

  • Palantir Slumps as Defence Budget Concerns Weigh on Sentiment: Palantir shares fell 5.2% on Thursday, extending their weekly decline to over 10%. The drop came after reports indicated that Defence Secretary Pete Hegseth urged department officials to prepare for potential budget cuts, raising concerns over future government contracts for the company. 
  • Walmart Tumbles Following Weak Fiscal 2026 Guidance: Walmart shares plunged 6.5% after the company’s forward guidance disappointed investors, despite reporting fiscal fourth-quarter earnings that topped estimates. The retail giant forecast fiscal year sales growth between 3% and 4%.
  • Alibaba Surges on Strong Profit Growth: Alibaba shares jumped more than 8% after the company posted a sharp increase in profits for the December quarter. The earnings boost was driven by strong performance in its Cloud Intelligence and e-commerce businesses. 
  • Carvana Plunges as Profit Margins Disappoint: Carvana shares sank 12.1% after the company reported fourth-quarter results that fell short of expectations. The online used-car retailer’s gross profit per unit came in at $6,671, missing analysts’ projections of $6,851. 
  • Amplitude Soars on Earnings Beat: Software company Amplitude saw its stock surge 21.9% after posting a top- and bottom-line beat for the fourth quarter. The company reported earnings of $0.02 per share.

As the trading session came to a close, markets faced broad-based declines, with the Dow dropping over 450 points and the S&P 500 retreating from record highs amid mounting concerns over consumer spending and economic uncertainty. Weak guidance from Walmart weighed on retail stocks, while a rise in US jobless claims and a contraction in economic indicators added to investor caution. European markets struggled to find direction, and Asian stocks fell as Trump’s tariff threats and Fed rate concerns pressured sentiment. Meanwhile, gold surged to a fresh record high above $2,947 per ounce as traders sought safe-haven assets amid global uncertainty.