U.S. Market Takes a Breather as Walmart Stumbles, Alibaba Soars, and Tariff Worries Loom

Key Takeaways:

✅ Dow Drops: The Dow Jones Industrial Average (DJI) fell 0.73% (-323.95 points) as tariff concerns and corporate earnings weighed on sentiment.
✅S&P 500 Pulls Back: The S&P 500 (^GSPC) dipped 0.2% after hitting a record high earlier in the week.
✅Nasdaq Holds Ground: The Nasdaq Composite (^IXIC) lost 0.1%, as tech stocks showed resilience.
✅Walmart (WMT) Plunges: Despite meeting earnings expectations, WMT stock tanked 6.68% on a weak 2025 outlook.
✅Palantir (PLTR) Declines: The 8% Pentagon budget cut sent Palantir’s stock lower as defense spending concerns grew.
✅Carvana (CVNA) Slides 14%: Even after posting record profits, CVNA shares nosedived amid investor concerns over valuation.
✅Alibaba (BABA) Soars 13.7%: The Chinese e-commerce giant crushed earnings estimates as its AI and cloud divisions posted strong growth.

Wall Street hit a speed bump on Thursday as investors digested a mix of corporate earnings, geopolitical tensions, and looming tariff threats. The Dow Jones tumbled 323 points (-0.73%), dragged down by Walmart’s 6.68% stock crash, while the S&P 500 (-0.2%) and Nasdaq (-0.1%) pulled back slightly from record highs. Meanwhile, Alibaba (BABA) stole the spotlight, soaring 13.7% after smashing earnings expectations and unveiling aggressive AI and cloud expansion plans. Add in Trump’s proposed tariffs, the Pentagon’s 8% budget cut, and growing uncertainty about Fed rate cuts, and you have a market that’s both jittery and full of opportunities.

U.S. Stocks Retreat as Investors Weigh Economic and Political Risks

After a week of record-breaking gains, Wall Street stumbled on Thursday, as corporate earnings, Trump’s tariff policies, and Federal Reserve uncertainty took center stage.

The Dow Jones Industrial Average (^DJI) lost 0.73% (-323.95 points), while the S&P 500 (^GSPC) dipped 0.2%, cooling off after back-to-back record highs. The Nasdaq Composite (^IXIC) slipped 0.1%, cushioned by strength in select tech stocks.

Markets were rattled by Walmart’s cautious guidance, growing uncertainty around Trump’s trade policies, and the Federal Reserve’s reluctance to commit to rate cuts.

Let’s break down the biggest market movers and what’s driving today’s action.

Dow Jones Sinks as Walmart Warns of Slower Growth

The Dow Jones Industrial Average suffered a sharp 323-point decline, led by Walmart (WMT), which tanked 6.68% after offering a conservative 2025 outlook.

Walmart Stock Performance:

Walmart (WMT) Stock Decline After Earnings Report

As shown in the chart, Walmart (WMT) stock dropped sharply after its weaker-than-expected guidance for fiscal 2025.

📉 What’s behind Walmart’s slump?

• Earnings met expectations, but future guidance disappointed.
• The company forecasted net sales growth of just 3-4%, signaling a slowdown in consumer spending.
• Concerns over price sensitivity among U.S. consumers in an uncertain economic environment.

Analyst Take:

🔹Deutsche Bank: “Investors will overlook the strong quarter and focus on Walmart’s cautious 2025 outlook.”

📉 Carvana (CVNA) Stock Tanks Despite Record Profits

The online car retailer Carvana (CVNA) reported record revenue and profits, but its stock plunged 14% as investors locked in profits after a huge run-up.

📊 Carvana’s Key Metrics:

✔ Revenue: $13.67 billion (+33% YoY)
✔ Adjusted EBITDA: $1.378 billion (10.1% margin)
✔ Retail Units Sold: 416,000 (+33%)

Despite the impressive numbers, investors worried about Carvana’s long-term sustainability and valuation.

CEO Ernie Garcia:

“Carvana became the most profitable public automotive retailer in U.S. history by adjusted EBITDA margin.”

Trump’s Tariffs Create Market Uncertainty

Markets remain on edge as investors digest President Trump’s aggressive trade policies.

🔹 Trump’s Proposed Tariffs Include:

• 10% on Chinese imports
• 25% on Canadian and Mexican imports
• Potential retaliatory measures from China and Europe

🛑 Market Reaction:

• General Motors (GM) considering business restructuring to deal with tariff impacts.
• Palantir (PLTR) shares fell due to an 8% cut in U.S. military spending, raising concerns about future government contracts.

Alibaba (BABA) Surges 13.7% on Strong Earnings

One of the biggest winners today was Alibaba (BABA), which rallied 13.7% after crushing earnings expectations.

📊 Alibaba’s Earnings Highlights:
✔ Revenue: 280.15 billion yuan (beat estimates)
✔ Net Income: 48.94 billion yuan ($6.72 billion) – +238% YoY
✔ AI & Cloud Growth: 13% YoY growth

CEO Eddie Wu:

“AI-driven strategies are driving substantial growth, and we will aggressively invest in cloud and AI infrastructure over the next three years.”

🔹 Alibaba’s stock is now up 50% YTD, fueled by AI, cloud expansion, and strong e-commerce growth.

U.S. Stock Market Performance Today

Let’s visualize today’s major stock moves: ​​

U.S. Stock Market Performance Today

The chart above highlights today's biggest market movers:

• Dow (-0.73%) and S&P 500 (-0.2%) dipped, cooling off after record highs.
• Walmart (-6.68%) and Carvana (-14.09%) plunged on weaker guidance and profit-taking.
• Alibaba (+13.7%) soared on strong AI and cloud growth.

Market Outlook: What’s Next?

🔹 Bullish Case:

✅ Tech stocks remain resilient, with Alibaba leading AI-driven growth.
✅AI and cloud investments are creating new opportunities.
✅Potential Fed rate cuts later this year could fuel further gains.

🔹 Bearish Case:

❌ Trade war fears are rising, with Trump's tariffs affecting major industries.
❌Consumer spending could slow, as seen in Walmart’s cautious guidance.
❌Market volatility increasing, with Palantir, GM, and Carvana struggling.

Investor Strategy:

• Short-Term: Watch for further tariff developments and Fed policy updates.
• Long-Term: AI and cloud stocks (like Alibaba) remain strong bets, while retail and auto stocks face challenges.

Investors face a balancing act. On one side, AI-driven growth stories like Alibaba continue to attract bulls, while on the other, weak retail guidance and policy uncertainty are keeping markets on edge. With earnings season in full swing and tariff developments looming, expect volatility to stay high—but for those who time it right, opportunities will be plentiful.