U.S. stocks increased Thursday as investors digested corporate earnings and macroeconomic data while the post-tariff-truce rally lost steam. The S&P 500 rose 0.36%, on pace for a fourth straight day of gains. The Dow Jones Industrial Average advanced 0.30%, while the tech-heavy Nasdaq Composite added just 0.05%, pausing after six consecutive up sessions.
Markets were steady but cautious, as disappointing retail sales figures clashed with slower-than-expected wholesale inflation, and Walmart’s results suggested tariffs are starting to push prices higher.
Market Movers:
- Walmart (WMT) -1.15%: Shares fell after the retail giant warned that it could no longer absorb the full cost of U.S. tariffs. Despite beating estimates on earnings and same-store sales, Walmart said prices were already rising across categories like groceries and health and wellness. The company reiterated conservative full-year guidance and flagged that reduced but still-high tariffs will continue to pressure margins.
- UnitedHealth (UNH) -13.78%: UnitedHealth plunged to a five-year low following reports of a potential DOJ investigation into Medicare fraud. This comes just days after the company pulled its 2025 forecast and abruptly replaced its CEO. The negative headlines have erased more than 50% of the stock’s value in the past month, weighing heavily on the Dow.
- Coinbase (COIN) -6.56%: The crypto exchange dropped after disclosing a cyberattack that exposed customer data. Hackers demanded a $20 million ransom, which Coinbase refused to pay. Instead, the company announced a bounty program and said it would reimburse affected users. The stock slid despite reassurances that no funds or passwords were compromised.
- Deere & Company (DE) +2.59%: Deere hit a new all-time high after posting better-than-feared earnings, despite a 22% profit drop year over year. Investors cheered management's commentary that the agriculture sector may have bottomed. The company trimmed its full-year outlook but said demand remained healthy across equipment categories.
- Alibaba (BABA) -7.94%: Shares sank nearly 8% after the Chinese e-commerce giant missed revenue expectations. A fierce price war in China and ongoing tariff uncertainty are hurting margins. While Alibaba continues to shift strategy to stay competitive, investors remain cautious about the company's near-term outlook.
Tariffs Begin to Bite Retailers
Walmart’s earnings brought tariffs back into focus after several quiet days. CEO Doug McMillon said the company had already raised prices in April and May, and narrow margins meant more increases could be coming. While Walmart's size offers negotiating power with suppliers, even the nation’s largest retailer can't fully absorb elevated import duties. Retail sales data reflected this strain, slowing sharply in April after a March spending surge tied to pre-tariff stockpiling by consumers.
Mixed Signals on Inflation and Growth
The Producer Price Index fell 0.5% in April, offering a welcome surprise after months of inflation concerns. Coupled with this week’s soft Consumer Price Index data, it suggests that price pressures may be cooling, at least temporarily. Still, the Fed isn’t ready to declare victory. Jerome Powell reiterated that the U.S. economy may be entering a period of more frequent supply shocks, hinting at continued monetary caution. Meanwhile, weak retail sales and flat control group data suggest consumer demand could be softening under the surface.
Oil Slides on Iran Deal Hopes
Crude prices fell after President Trump said the U.S. is close to reaching a nuclear agreement with Iran, which could bring millions of barrels back into the global market. Brent crude dipped to $64 per barrel, while WTI hovered just above $61. The potential for increased supply weighed on energy stocks, adding another layer of volatility to a market already digesting trade, inflation, and consumer data.
Looking Ahead
With earnings season winding down and the effects of tariffs becoming more visible, markets are entering a more reactive phase. Investors are now focused on how pricing power, supply chain adjustments, and consumer resilience hold up through the summer. While soft inflation may ease Fed pressure, slowing retail sales and rising costs for major companies could limit upside — unless a longer-term trade resolution emerges. Until then, expect more day-to-day volatility and sector-specific reactions as the market digests mixed signals from Main Street and Washington alike.
