US stock futures fell on Monday night after Walmart cut its profit forecast, with retail stocks falling after hours.
The Dow Jones Industrial Average futures fell 133 points, or 0.4%. The S&P 500 and Nasdaq 100 futures lost 0.3% and 0.4%, respectively.
Late Monday announcement from Walmart, which Cut in estimates of quarterly and full-year profits Rising food inflation worried investors deliberating on the implications for other retail stocks. The big-box retailer said higher prices are prompting consumers to pull back on normal merchandise spending, especially in apparel.
Walmart fell about 9% in extended trading, and pulled other retailers along with it. Target dropped 5% and Amazon fell 4%. Macy’s and Dollar General each fell 3%, while Costco declined 2%.
“Clearly, they have the wrong stuff, and they’re going to have to sell it more aggressively to clean it up, which looks like it’s going to take a very dramatic hit as a result,” said Gradient Investments’ senior portfolio. Manager Jeremy Bryan. said during CNBC “Closing Bells: Overtime.”
“The question is, how does this relate to the rest of the discretionary space?” Brian added.
The stock traded in a narrow range, compared with a 0.1% rise in the S&P 500 during Monday’s session. The Dow Jones Industrial Average climbed 90.75 points, or 0.3%. The tech-heavy Nasdaq Composite slipped 0.4%. All major averages are on track for their best month of the year.
Traders brace for an onslaught of mega-cap technical earnings and economic data this week, as well as the outcome of the Federal Reserve meeting, which will help Wall Street guide its expectations for the rest of the year.
“I think there’s going to be a bifurcated market,” VantageRock’s Avery Sheffield said during CNBC’s “Closing Bell: Overtime.” “I think the bottom may be in some stocks, but nowhere in others. So this could really be one of the most dynamic earnings seasons we’ve seen in a long time.”
On Tuesday, the Federal Reserve will begin its two-day policy meeting. Traders are widely expecting a growth of three-quarters of a percent.
Coca-Cola, McDonald’s and General Motors are set to report earnings before the bell on Tuesday. Alphabet, Microsoft, Chipotle Mexican Grill, UPS and Enphase Energy will report after the bell.
On the economic front, traders expect the latest reading of the Case-Shiller Home Price Index at 9 a.m. ET. Consumer confidence reports and new home sales data are due out at 10 a.m. ET.