Thursday, February 19: US stock futures slipped in early trade, giving back a portion of the previous session’s gains, as investors reacted to a weak full-year outlook from Walmart and rising geopolitical tensions between the US and Iran.
Futures linked to the Dow Jones Industrial Average fell 130 points, or 0.3 percent. S&P 500 futures declined 0.3 percent, while Nasdaq 100 futures dropped 0.4 percent, indicating a softer start for Wall Street.
Shares of Walmart traded nearly 3 percent lower after the retail giant issued a full-year earnings outlook that fell short of market expectations. The cautious guidance overshadowed its better-than-expected fourth-quarter results, dampening overall investor sentiment.
At the same time, crude oil prices extended gains as tensions between the United States and Iran intensified over Tehran’s nuclear program. West Texas Intermediate futures rose more than 1 percent on Thursday, trading above $66 per barrel, adding to concerns about inflation and energy costs.
The pullback in futures comes after a strong session on Wednesday, when Wall Street was lifted by gains in the so-called “Magnificent Seven” technology stocks along with strength in financial and energy counters.
Edward Jones senior global investment strategist Angelo Kourkafas said a rebound in mega-cap stocks would not be surprising in the coming weeks. However, he cautioned that while pessimism in the technology sector may have become overstated, sustainable leadership from the group remains doubtful as the macroeconomic environment continues to favour cyclical stocks.