S&P 500 posts longest losing streak since January weighed by macro data, Walmart results

Benchmark indices on Wall Street continued to grind lower pressured by selling in big tech names and caution ahead of Federal Reserve Chair Jerome Powell’s speech at Jackson Hole later this evening.The S&P 500 ended lower for the fifth day in a row, marking its longest losing streak since January this year. The Dow Jones fell 150 points weighed by a 4.5% drop in Walmart, while the Nasdaq fell 0.3%.

Macro data reported on Thursday further reduced probability of the Federal Reserve cutting interest rates in September. Initial data for manufacturing activity in August indicated a jump to the highest level since May 2022, although a gauge of finished goods inventory rose to the highest on record, indicating customer caution at the ground level as companies pass on higher tariff costs.

As a result of the initial manufacturing data, the probability of a 25 basis points rate cut from the US Federal Reserve in September fell to 75% on the CME FedWatch tool, from 92.1% last week. Fed Bank of Cleveland chief Beth Hammack also said she wouldn’t support easing if officials had to decide tomorrow.
Initial Jobless Claims for the week ending August 16 rose by 2.35 lakh, higher than the 2.25 lakh estimate. Continuing jobless claims remained at the highest level since November 2021, indicating that out of work Americans are finding it increasingly difficult to land a new job.Walmart shares fell 4.5% on Thursday despite raising full-year guidance for both revenue and EPS as the world’s largest retailer missed expectations on the profitability front for the first time in over three years. Walmart also said that higher tariff costs have been passed to consumers in certain areas, without getting into specifics.

All eyes later this evening will be on Fed Chief Jerome Powell, as he addresses Jackson Hole one final time at 7:30 PM Indian time. The street would be pinning hopes on the Fed Chair indicating a rate cut in September, as analysts believe, anything less than that could trigger a risk-off sentiment on the street.

“Stock valuations are very elevated right now heading into Jackson Hole, and investors have very high expectations that Powell will hint at a September rate cut,” said Rick Gardner, chief investment officer at RGA Investments. “Anything short of that could push investors to take some chips off of the table, especially given lighter August trading volume and a reluctance for risk heading into a weekend.”

(With Inputs From Agencies.)