S&P 500 Falls for 5th Straight Day as Investors Brace for Powell Speech; Walmart Stock Tumbles After Earnings

How Might Stocks React to Powell’s Speech?

4 minutes ago

Wall Street was on edge Thursday as investors awaited what is bound to be a pivotal policy speech from Federal Reserve Chair Jerome Powell. 

Traders are positioning themselves accordingly. Options pricing suggests investors expect the S&P 500 to move about 0.8% in either direction through the end of this week. That’s nearly twice the S&P 500’s average daily move over the past month. 

At last year’s Jackson Hole, Powell declared the Fed was ready to begin cutting interest rates more than a year after policymakers hiked rates for the 11th and final time in their post-pandemic policy tightening campaign. 

“The time has come for policy to adjust,” Powell said. “With an appropriate dialing back of policy restraint, there is good reason to think that the economy will get back to 2 percent inflation while maintaining a strong labor market.”

It was the news Wall Street was hoping for. The S&P 500 jumped more than 1% to trade just shy of an all-time high. Though for investors last year, seeing was believing; it wasn’t until mid-September, when the Fed cut rates for the first time, that the index finally broke its previous record. 

Evercore ISI analysts warned in a note on Sunday that Powell’s speech could deliver stocks a rough patch if Wall Street finds his comments inadequately dovish. “For a market that was eager to embrace ’50 in Sept’, a balanced view could catalyze a near term -7% to -15% pullback into October,” the analysts wrote, referring to recent speculation that the Fed could make a jumbo, 50 basis point (bps) cut next month. 

Deutsche Bank economists are also worried about Wall Street’s high hopes. In a note earlier this week, they expressed concern that Powell’s comments, which they expect to be “more balanced” than his last statement in July, “could create uncertainty about September cut prospects, at least relative to current elevated pricing.”

But expectations and stock prices have moderated in recent days. The S&P 500 fell in each of the last four sessions. If the index declines on Thursday, it will mark its longest losing streak this year. 

And in the last week, traders have become less confident of any rate cut, let alone a jumbo one, in September. Federal funds futures trading data put the odds of a 25 bps cut at about 72% on Thursday, down from 92% a week ago, according to CME Group’s FedWatch Tool

–Colin Laidley

Boeing in Talks to Sell 500 Planes to China, Report Says

3 hr 44 min ago

Boeing (BA) is reportedly in discussions to sell as many as 500 jets to China in what would be a breakthrough for the aircraft manufacturing giant.

Bloomberg News, which reported the news, said that the two sides are still working out the details, including the number and kinds of aircraft included. However, Chinese officials have already begun asking domestic airlines how many planes they want, the report said.

Boeing has only made a handful of sales to Chinese carriers over the past few years. The sale would be a key element of a potential trade deal that has been in the works between the Trump administration and Beijing. 

Bloomberg said the talks have been under way for years, and the countries were close to an agreement when then-President Joe Biden met with Chinese leader Xi Jinping in San Francisco in 2023.

Boeing shares were little changed in recent trading. The stock has gained 27% since the start of the year, making it the second-biggest gainer in the Dow Jones Industrial Average, trailing only AI chips giant Nvidia (NVDA) slightly.

–Bill McColl

HP Enterprise Rises as Morgan Stanley Upgrades Amid AI Boom

4 hr 35 min ago

Hewlett Packard Enterprise (HPE) shares advanced Thursday on an upgrade by Morgan Stanley, which sees increased corporate spending on the computer processing hardware maker’s artificial intelligence and other products.

Morgan Stanley raised its rating to “overweight” from “equal-weight,” and boosted the price target to $28 from $22. The stock was up about 3% at just under $22 in recent trading.

In a note to clients, the analysts said that “our checks signaled healthy enterprise spending across the board in the quarter, led by anything AI compute or networking related, followed by client devices (strong PC refresh), and then servers/storage, with networking growth inflecting positively for the first time in several quarters.”

They added that their research “leaves us positive on the potential for top and bottom line outperformance in the July quarter across the group.”

Along with the Hewlett Packard Enterprise moves, Morgan Stanley also increased the price targets for Dell Technologies (DELL) and NetApp (NTAP). 

With today’s gains, shares of Hewlett Packard Enterprise nudged into positive territory this year.

–Bill McColl

Coty Plunges 20% After Reporting Surprise Loss

5 hr 32 min ago

Coty (COTY) shares lost a fifth of their value in early trading Thursday, a day after the cosmetics maker posted a surprise loss and gave weak guidance as retailers pulled back on orders.

The company behind its namesake brand, Max Factor and many others reported a fiscal fourth-quarter net loss attributable to shareholders of $72.1 million and an adjusted decline of $0.05 per share. Analysts surveyed by Visible Alpha were looking for net income of $37.6 million, and an adjusted profit of $0.01 per share. Revenue fell 8% year-over-year to $1.25 billion, but that was better than forecasts. Like-for-like sales dropped 9%.

CEO Sue Nabi said that during the fiscal year, retailers were “acting with caution in the current environment.” Nabi noted along with retailer restocking, Coty’s results were hurt by “softness” in U.S. demand, pressure in the mass cosmetics market, and slower fragrance sales after a strong fiscal 2024. 

Looking ahead, the company said “broader macroeconomic and tariff uncertainty is fueling cautious retailer ordering and a more promotional competitive environment.” It sees current quarter like-for-like sales sinking 6% to 8%, and second quarter like-for-like sales down 3% to 5%. The company added that it anticipates those sales will return to positive gains in the second half of the fiscal year.

Coty shares were down 21% in recent trading, pushing the stock’s year-to-date decline to 45%.

–Bill McColl

Walmart Slides as Profit Misses Analysts’ Estimates

6 hr 50 min ago

Shares of Walmart (WMT) fell 3% before the opening bell Thursday after the giant retailer reported fiscal 2026 second-quarter profit below expectation. 

The Bentonville, Ark.-based firm posted adjusted earnings per share of $0.68, below the $0.73 expectation of analysts surveyed by Visible Alpha. Revenue increased nearly 5% year-over-year to $177.40 billion, ahead of the $175.97 billion consensus.

U.S. comparable sales growth came in at 4.3%, above the 4.1% projection. Global eCommerce sales rose 25%, “led by store-fulfilled pickup & delivery and marketplace,” while analysts were looking for 17.2% growth.

However, operating income fell more than 8%, “affected by discrete legal and restructuring items,” Walmart said.

Walmart raised its fiscal 2026 outlooks for revenue growth and adjusted EPS, to 3.75% to 4.75% and $2.52 to $2.62, respectively. For the current quarter, it sees revenue growth of 3.75% to 4.75% and adjusted EPS of $0.58 to $0.60, both above consensus estimates.

Walmart shares entered Thursday up about 14% this year at $102.57, with all 12 of the analysts tracked by Visible Alpha with recent assessments recommending buying them. 

“Net-net, we see some potential small pressure on the shares but the report in no way fundamentally alters the bull case, in our view,” JPMorgan analysts wrote in a note.

–Aaron Rennie

Major Index Futures Point to Lower Open

7 hr 22 min ago

Futures tied to the Dow Jones Industrial Average were down 0.4%.

S&P 500 futures fell 0.3%.

Nasdaq 100 futures slipped 0.2%.