In the early hours of the 21st, Beijing time, US stocks closed lower on Thursday as major indices retreated. The S&P 500 fell 26.63 points, or 0.43%, closing at 6117.52 points after reaching a new high yesterday; the Dow Jones declined 450.94 points, or 1.01%, to end at 44176.65 points; and the Nasdaq slipped 93.89 points, or 0.47%, finishing at 19962.36 points. The market pressure mainly stemmed from retail giant Walmart, which issued earnings guidance below expectations, weighing on the indices. Walmart's stock plummeted 6.5% as the company projected a sales growth of only 3% to 4% for this fiscal year, with 2026 profit forecasts also falling short of analysts' expectations.
Furthermore, investors have begun questioning the high valuations of tech giants, with four out of the top seven tech companies experiencing a drop in stock prices. Compared to the peak at the end of 2023, the contribution of these tech stocks to earnings growth has slowed down. At the same time, trade policies proposed by the Trump administration, particularly import tariffs, have heightened the risk of a global trade war, putting pressure on market sentiments. Andrew Slimmon of Morgan Stanley pointed out that the influx of retail investor funds into highly speculative stocks raises concerns about bullish sentiment in the US stock market.
Strategists at Citigroup also expressed caution about the outlook for US stocks, suggesting that Trump's "America First" policy might have short-term beneficial effects on businesses, but these policies could potentially damage fundamentals in the long run. Citigroup believes that the current 4.5% gain in US stocks might be nearing a short-term peak.
Additionally, Atlanta Fed President Raphael Bostic stated on Thursday that he expects the Federal Reserve to cut rates twice by 2025, though this forecast faces significant uncertainty. He emphasized that while monetary policy is currently well-positioned, rising uncertainties could impact the labor market and inflation trends, warranting increased vigilance from officials.
St. Louis Fed President James Bullard also expressed concerns over rising inflation expectations, noting that if inflation expectations fail to stabilize, the Fed might be forced to take stronger tightening measures. Bullard warned that the current economic environment could present greater challenges to the Fed's rate-cutting plans.
In the latest economic data, initial jobless claims in the US rose to 219,000 last week, slightly higher than expected. The February Philadelphia Fed Manufacturing Index fell to 18.1, signaling signs of a slowdown in manufacturing activity. Changes in the Prices Paid Index and New Orders Index further highlight the pressures faced by the economy.
