US stocks fell on Thursday as oil prices and benchmark bond yields rose, while disappointing earnings from Walmart Inc. pressured shares of the retail giant and peers.
The S&P 500 slumped 0.9%, while the Nasdaq 100 fell 0.7% to notch its fifth straight day of losses.
Brent crude oil gained as much as 3.4% to nearly $95 a barrel, the highest in almost four weeks, after President Donald Trump threatened Iran with "economic warfare" and said the country failed to take a deal.
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Benchmark 10-year Treasury yields, which have been "highly correlated" with oil prices, "are a headwind for stocks" as they are seeing upward pressure from "$90 oil and no Fed rate hikes being priced," said Dennis Debusschere, chief market strategist at 22V Research.
The 10-year yield ended Thursday at 4.70%, with US bonds paring the gains they posted Wednesday when the Treasury Department announced its plans to increase buybacks of longer-dated debt.
While traders initially cheered Wednesday's action, the enthusiasm didn't last long because it doesn't address the overarching reasons for the rise in yields, said Mark Malek, chief investment officer of Muriel Siebert & Co. "It was just a housekeeping move destined to be short-term, at best." Stocks and bonds remained lower on Thursday even after Treasury Secretary Scott Bessent said debt buybacks might be bigger than the stepped-up amount announced Wednesday.
"It almost seemed like investors were hoping that Treasury Bessent's midday comments would help restore the decline in yields that took place yesterday," said Matt Maley, chief market strategist at Miller Tabak + Co. "When those comments were not enough to offset the further rally in crude oil, investors started to hit the sell button."
Traders will now look toward Federal Reserve Chairman Kevin Warsh's speech at the Jackson Hole Economic Policy Symposium next week for clues on the path of interest rates.
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Rounding out a week of disappointing consumer earnings, Walmart reported second-quarter results that missed estimates, sending shares down as much as 10% in the biggest intraday decline since May 2022. Sales at US stores open at least a year, excluding fuel, rose 2.6%, shy of the lowest analyst estimate and the slowest growth in over six years. Target Corp. and Dollar General Corp. shares also fell after the report.
In other single-stock moves, Moderna Inc. shares fell 24% after gaining 177% on Wednesday on positive news about its melanoma vaccine. Advanced Auto Parts Inc. shares slumped as much as 28% after reporting second-quarter sales that missed estimates, despite maintaining or boosting full year guidance for certain metrics. It's the stock's biggest decline since May 2023.
Sectors to Watch
- Walmart's disappointing results, punctuated by the slowest sales growth in years, dragged down consumer peers Costco Wholesale Corp. and Kroger Co.
- Agriculture and fertilizer stocks rose after tractor and equipment maker Deere & Co. raised the lower end of its full-year profit forecast.
- Crowdstrike Holdings Inc. shares fell 5.6% after Axios reported that it's chief technology officer is leaving to launch and AI-cyber fund, sending other cybersecurity firms like Palo Alto Networks, Inc. lower alongside it.
- Cryptocurrency-linked stocks climbed after Bitcoin's rally unleashed the biggest wave of short liquidations in records going back to 2021, and Trump met with crypto executives on Thursday.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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