Stock market futures retreated Thursday morning, ending a three-day rally for the S&P 500, as major technology companies saw their shares decline and retail giant Walmart issued a cautious business forecast.
The Arkansas-based retailer projected annual sales and earnings below what Wall Street analysts had anticipated, causing its stock price to fall 3% before regular trading hours began. Despite this setback, Walmart achieved a historic milestone earlier this month by becoming the first American retailer to reach a $1 trillion market valuation.
Major technology companies including Apple, Nvidia, and Meta Platforms all saw their stock prices retreat after posting gains in the prior trading session.
Wednesday’s trading session had concluded with all three primary U.S. stock indices posting positive results, driven largely by technology sector gains including Nvidia and Amazon.com, as investors moved past recent concerns about artificial intelligence investments.
Technology stocks tied to AI development and large-cap companies experienced volatility earlier in February as investors questioned whether massive AI spending would translate into meaningful revenue and profit increases, given their elevated stock valuations.
Various industries from software development to transportation have also faced pressure amid worries that advancing AI technology could threaten their established business operations.
Tom Nelson, who serves as head of market strategy at Franklin Templeton, observed the changing market dynamics in a research note: “The rotation in sectors, styles, and country leadership suggests that equity markets may no longer be driven by a singular theme; instead, a meaningful broadening appears to have emerged.”
Pre-market trading at 7:15 a.m. Eastern Time showed the Dow E-minis declining 131 points or 0.26%, while S&P 500 E-minis dropped 16.25 points or 0.24%, and Nasdaq 100 E-minis fell 97.5 points or 0.39%.
Several companies posted strong results in earnings-driven trading moves. Food delivery service DoorDash surged 9.9% after projecting first-quarter marketplace gross order value that exceeded Wall Street forecasts.
Online marketplace eBay gained 9.2% following its forecast of first-quarter revenue above analyst projections and its announcement of acquiring fashion platform Depop from Etsy. Etsy’s shares jumped 19% on the news.
Used car retailer Carvana tumbled 14.5% after reporting fourth-quarter profits that missed expectations due to increased operational costs.
Federal Reserve meeting minutes released Wednesday revealed that central bank officials reached near-consensus agreement to maintain current interest rates unchanged.
However, policymakers showed divided opinions regarding future monetary policy direction, with “several” officials open to raising rates if inflation persists at elevated levels, while others favored additional cuts should inflation decline as projected.
Four Federal Reserve officials, including Chicago Fed President Austan Goolsbee and Fed Vice Chair for Supervision Michelle Bowman, are expected to deliver public remarks Thursday.
Weekly unemployment claims data will be released later Thursday, followed by Friday’s personal consumption expenditure report, which represents the Federal Reserve’s preferred inflation measurement.
Telehealth company Hims & Hers saw its shares climb 7.5% after announcing plans to acquire Australian digital health firm Eucalyptus for as much as $1.15 billion.
Energy giants Exxon Mobil and Chevron both rose over 1% as crude oil prices increased amid growing concerns about potential military confrontation between the United States and Iran.
Occidental Petroleum jumped 4.6% after the shale oil producer reported fourth-quarter earnings that surpassed analyst expectations.
