US stock markets ended Thursday with sharp declines, driven by concerns over new tariffs and a disappointing outlook from the world's largest retailer, Walmart. Investors began dumping stocks en masse, sending all three key US indexes into the red. The Dow Jones suffered the biggest losses, falling 1.01%, while the S&P 500 snapped its streak of record closes.
Amid market volatility, investors flocked to traditional safe havens, sending gold prices to record highs, underscoring growing economic uncertainty.
The market was hit hard by the release of Walmart's (WMT.N) quarterly earnings and sales forecasts, which missed analysts' expectations, a warning sign of weakening consumer activity.
"Consumer spending accounts for about 70% of the U.S. economy, and Walmart's weak outlook raised concerns about future household spending," said Robert Pavlik, senior portfolio manager at Dakota Wealth.
Walmart's own shares fell 6.5%, but the blow was much wider: other major retailers such as Target (TGT.N) and Costco Wholesale (COST.O) also fell, losing 2.0% and 2.6%, respectively.
Adding to the pressure on the market were new tariffs announced by the Trump administration. On Wednesday, the list of goods subject to tariff restrictions was expanded to include lumber, automobiles, semiconductors and pharmaceuticals.
These changes are further increasing tensions among investors and businesses, making markets nervous and looking for ways to minimize risks.
Despite recent market turbulence, fresh economic data shows that the US economy remains on a stable trajectory. The jobless claims and business activity data in the Atlantic region are in line with expectations and confirm recent statements from Federal Reserve officials.
However, not all experts share the optimism. Some economists warn that the labor market could face turmoil due to massive layoffs in the federal sector. One of the main sources of instability is the layoffs at the Department of Government Efficiency (DOGE), founded by billionaire Elon Musk.
Markets continued to fall, reflecting growing investor concerns. The Dow Jones Industrial Average lost 450.94 points, or 1.01%, to close at 44,176.65. The S&P 500 also ended the day in the red, falling 26.63 points, or 0.43%, to 6,117.52. The tech-heavy Nasdaq Composite lost 93.89 points, or 0.47%, to 19,962.36.
The financial sector was the most pressured, with the S&P 500 Financials (.SPSY) falling 1.6%, while energy (.SPNY) was the only sector to show positive momentum, up 1.0%.
Palantir Technologies (PLTR.O) shares fell sharply by 5.2% after the U.S. Defense Department announced plans to potentially cut the military budget for fiscal 2026. That has raised investor concerns, as the company derives a significant portion of its revenue from government contracts, including projects to develop software for military analytics.
Meanwhile, Chinese e-commerce giant Alibaba Group pleased investors. The company's U.S.-listed shares soared 8.1% after reporting quarterly earnings that beat analysts' estimates.
Another winner of the day was toymaker Hasbro (HAS.O), whose shares jumped 13.0%. The company managed to beat market expectations for profit and revenue, which strengthened investors' faith in its business prospects even in the face of economic uncertainty.
While macroeconomic data does not yet signal a downturn, rising risks from labor market cuts, tariff barriers and government funding volatility could weigh on stock indices in the coming months. Investors continue to balance optimism and caution, keeping a close eye on the Fed's policies and the actions of major corporations.
Medical equipment maker Baxter International (BAX.N) posted an impressive 8.5% gain after 2025 profit guidance that beat market expectations. The company's upbeat outlook has fueled investor interest, boosting demand for stocks in the sector.
European stock markets are struggling after weeks of gains. The STOXX 600 (.STOXX) rose 0.2% on Friday, helped by gains in chemicals stocks. However, the index has been volatile throughout the week and was on track to fall 0.2%, which would end its longest eight-week winning streak since March 2024.
Investors remain cautious amid rising bond yields and fresh trade threats from US President Donald Trump, who has reiterated talk of imposing tariffs. These factors are putting pressure on stock markets, forcing market participants to seek a balance between risk and safety.
Market sentiment is largely determined by the upcoming publication of preliminary business activity indices (PMI) for February. Investors are awaiting reports on economic activity in the eurozone, Germany, France and the UK, which may indicate a slowdown in growth. The results are expected in the first hour of trading and could set the tone for the rest of the indices.
The UK's FTSE 100 index (.FTSE) traded little changed on Friday. Meanwhile, fresh data on UK retail sales showed a 1.7% increase in January, the highest since May last year. This positive signal about the state of consumer demand temporarily supported the market, but it does not eliminate the overall uncertainty.
British bank Standard Chartered (STAN.L) was also in the spotlight. Its shares soared by 4.7% after the publication of financial results. The bank reported an 18% increase in annual profit and announced a new share buyback worth $1.5 billion, which became an additional incentive to strengthen the company's position in the market.
While individual companies are showing positive results, the overall mood in the markets remains tense. Rising bond yields, the possibility of new trade tariffs and a slowdown in economic activity in Europe could be key factors determining the market movement in the coming weeks. Investors are closely monitoring macroeconomic data, trying to predict further developments.
The chemicals sector was among the stock market's best performers, thanks to strong performances by individual companies. Air Liquide (AIRP.PA), one of the world's largest suppliers of industrial gases, rose 2.8% after it updated its guidance. The company improved its medium-term operating margin estimate, a positive signal for investors. The growth was further boosted by 2024 sales, which were above market expectations.
The result bolstered confidence in the company and the sector as a whole, signaling stable demand for chemical products even in an environment of economic uncertainty.
Another bright spot in the market was a rally in shares of Irish construction materials and energy efficiency solutions company Kingspan (KSP.I). The company's shares jumped 10% after reporting 2024 results that beat analysts' expectations.
Kingspan's success is largely due to strong demand for insulation materials and solutions to improve the energy efficiency of buildings, which is becoming increasingly important in Europe against the backdrop of rising energy prices and stricter environmental standards.
The results of Air Liquide and Kingspan have increased interest in the industrial and chemical sectors, which demonstrate resilience even in the conditions of macroeconomic turbulence. Investors continue to closely monitor the companies' reports, hoping for positive signals that can support the stock market growth in the near term.
