The three main indexes closed lower on Thursday as rising Treasury yields dented risk appetite, disappointing results from retail bellwether Walmart soured investors on the consumer sector and rallying oil prices fanned inflation worries.
The Dow Jones Industrial Average tumbled 703.84 points, or 1.3%, to 52,759.21.
The S&P 500 lost 0.9%, and the Nasdaq Composite dropped 1%.
Walmart shares fell 9% after it missed Wall Street expectations for quarterly comparable sales rising gasoline prices had shoppers reining in spending.
The report dragged the S&P 500 consumer staples index down 1.5%. Consumer discretionary fell 1.9%, putting it among the weakest sectors.
Rival retailers also fell after Walmart’s earnings, with Albertsons down 1.2% and Costco down 2.5%.
Another negative, said Mona Mahajan, head of investment strategy at Edward Jones, was US crude oil trading above $87, touching its highest level since late July.
She also pointed to upward pressure on bond yields as a further weight on stocks.
Wall Street indexes had risen on Wednesday after the Treasury Department said it would spend more than double the expected amount on buying back bonds in a bid to slow gains in bond yields.
On Thursday, however, stocks declined as yields resumed their advance.
Treasury Secretary Scott Bessent said he may again increase the volume of Treasury bonds the government will repurchase.
Yields on the 30-year and 10-year bonds pared gains briefly after his comments, before resuming their upward path.
“There are a couple of headwinds that the markets woke up to today,” said Mahajan. “One was a resumption in the increase in bond yields across the curve that came despite yesterday’s Treasury move … it reversed very quickly, within 24 hours.”
And after weaker-than-expected retail sales data for July and mixed labor market reports, investors were already monitoring consumer health, when the Walmart numbers came in weaker than expected.
“There is some question about how resilient the consumer can be with ongoing elevated gas prices and inflationary pressures,” Mahajan said.
Separately, data showed the number of Americans filing claims for unemployment benefits slipped last week, suggesting the labor market remained stable.
Meanwhile, cryptocurrency-related companies rallied a day after President Trump called on Congress to pass a crypto bill. Bitcoin hoarder Strategy and exchange operator Coinbase Global rose almost 8%.
Biotech company Moderna dropped 24% a day after surging nearly 177%.
Deere gained 6.6% following a full-year net income forecast raise from the world’s largest farm-equipment manufacturer.
Coty fell more than 9% after the CoverGirl cosmetics brand owner forecast current-quarter earnings below expectations and withheld its annual outlook, while Advance Auto Parts tumbled nearly 25% after issuing a weaker annual sales forecast.