Daily Summary: Markets Decline After Digesting Retail Sector Earnings

S&P 500 fell 0.7%, retreating from its record high as retail and technology stocks led the decline. The index had previously achieved its third closing record of 2025 the day before. Dow Jones Industrial Average posted the largest decline among major indices, dropping 1.4% or around 600 points. Nasdaq Composite and Nasdaq 100 both declined 0.8%, dragged down by technology sector weakness. Russell 2000 fell 1.2%, indicating broader market weakness extending to smaller companies.

Walmart shares plunged 6.6% after the retail giant issued lower-than-expected profit guidance for fiscal year 2026, projecting adjusted EPS of $2.50-2.60 versus $2.77 analyst estimates. The company still posted strong Q4 results with US comparable sales up 4.6% and e-commerce growth of 20%. Palantir Technologies dropped 7.5% following Defense Secretary Hegseth's announcement of an 8% reduction in projected military spending over five years. 

Carvana shares tumbled 11% despite beating overall estimates, as investors focused on pressure in gross profit margins and lower wholesale volumes. Shake Shack surged 14% after reporting 3.7% January comparable sales growth despite weather challenges, raising its 2025 adjusted EBITDA guidance to $205-215 million.

Initial jobless claims rose to 219,000, slightly above the forecast of 215,000, while continuing claims reached 1.869 million.

Chicago Fed President Goolsbee suggested upcoming PCE inflation data might not be as concerning as recent CPI figures, while expressing worry about potential tariff impacts. Atlanta Fed President Bostic projected two interest rate cuts in 2025 but emphasized the need for vigilance amid policy uncertainty. Market participants continue to adjust rate cut expectations as Fed officials maintain a cautious stance on inflation progress.

Mortgage rates edged lower to 6.85% from 6.87%, though mortgage applications fell to their weakest level this year with purchase applications down 6% and refinancing dropping 7%.

WTI crude oil advanced above $73 per barrel, supported by potential supply constraints from reduced Kazakh pipeline flows and OPEC+ considerations. EIA reported crude inventories increased by 4.63 million barrels, exceeding forecasts of 3.2 million barrels.

NATGAS is losing more than 5% today. Prices have remained on a downward trajectory since the beginning of the session, and even the EIA report indicating a larger-than-expected decline in inventories did not help the contract. The weekly inventory change was -196 billion cubic feet (compared to the forecasted -193 billion cubic feet).

Gold prices reached new record highs as investors sought safe-haven assets amid geopolitical tensions.

The US Dollar Index weakened 0.6% against a basket of major currencies. The Japanese Yen is the strongest currency today with a gain of 1.2% to the US Dollar.

Consumer spending outlook remains uncertain following Walmart's cautious guidance, potentially signaling broader retail sector challenges.