Stocks Slip Before the Open With Focus on U.S. Economic Data and Fed Speak, Walmart Earnings on Tap

March S&P 500 E-Mini futures (ESH25) are down -0.15%, and March Nasdaq 100 E-Mini futures (NQH25) are down -0.17% this morning as investors assess tariff and geopolitical risks, while also awaiting a raft of U.S. economic data, remarks from Federal Reserve officials, and an earnings report from retail giant Walmart.

Market jitters have been fueled in recent days by U.S. President Donald Trump’s apparent shift away from supporting Ukraine and its European allies, along with his threats to expand tariff plans across multiple sectors. Trump told reporters on Wednesday that he is considering a 25% tariff on lumber, with the import levy potentially coming around April 2nd. Trump also said he would announce tariffs on cars, semiconductors, and pharmaceuticals “over the next month or sooner.”

The minutes of the Federal Open Market Committee’s January 28-29 meeting, released Wednesday, showed that officials are in no hurry to cut interest rates amid stubborn inflation and economic policy uncertainty. “Participants indicated that, provided the economy remained near maximum employment, they would want to see further progress on inflation before making additional adjustments to the target range for the federal funds rate,” according to the FOMC minutes. Policymakers are also monitoring the implementation of Trump’s economic policy plans and their potential impact on the economy. “Participants cited the possible effects of potential changes in trade and immigration policy, the potential for geopolitical developments to disrupt supply chains, or stronger-than-expected household spending,” the minutes said. Still, officials anticipated that “under appropriate monetary policy” inflation would continue to move toward their 2% target.

“Another ‘nothing burger’ from the Fed. After making a big adjustment in December there is no rush to make other changes. It’s uncharted territory but not necessarily bad for stocks,” said David Russell at TradeStation. 

In yesterday’s trading session, Wall Street’s major indexes ended higher. Garmin (GRMN) surged over +12% and was the top percentage gainer on the S&P 500 after the company reported better-than-expected Q4 results and provided solid FY25 guidance. Also, quantum computing stocks soared on Microsoft’s new chip, with D-Wave Quantum (QBTS) jumping more than +8% and Quantum Computing (QUBT) climbing over +7%. In addition, Analog Devices (ADI) rose more than +9% after the chipmaker posted upbeat FQ1 results and issued above-consensus FQ2 guidance. On the bearish side, Celanese (CE) plummeted over -21% and was the top percentage loser on the S&P 500 after the specialty chemicals company swung to a quarterly loss.

Economic data released on Wednesday showed that U.S. housing starts fell -9.8% m/m to 1.366M in January, weaker than expectations of 1.390M. At the same time, U.S. building permits, a proxy for future construction, rose +0.1% m/m to 1.483M in January, stronger than expectations of 1.460M.

Fed Vice Chair Philip Jefferson said on Wednesday that a strong U.S. economy gives policymakers the flexibility to wait before considering further interest rate cuts. Also, Atlanta Fed President Raphael Bostic said, “I’ve been really comfortable with the idea that we would take a pause and wait and see how the economy’s evolving and then use that information to guide what our policy should look like over the next several months.”

Meanwhile, U.S. rate futures have priced in a 97.5% probability of no rate change and a 2.5% chance of a 25 basis point rate cut at the March FOMC meeting.

Today, retail giant Walmart (WMT) and notable companies like Booking (BKNG), Copart (CPRT), Block (XYZ), and Rivian Automotive (RIVN) are slated to release their quarterly results.

On the economic data front, all eyes are on the U.S. Philadelphia Fed Manufacturing Index, which is set to be released in a couple of hours. Economists, on average, forecast that the February Philly Fed manufacturing index will stand at 19.4, compared to last month’s value of 44.3.

Investors will also focus on U.S. Initial Jobless Claims data. Economists expect this figure to be 215K, compared to last week’s number of 213K.

The Conference Board’s Leading Economic Index for the U.S. will be reported today. Economists forecast the January figure at -0.1% m/m, the same as the previous reading.

U.S. Crude Oil Inventories data will be released today as well. Economists estimate this figure to be 3.200M, compared to last week’s value of 4.070M.

In addition, market participants will be anticipating speeches from Fed officials Goolsbee, Jefferson, Musalem, Barr, and Kugler.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.524%, down -0.24%.

The Euro Stoxx 50 Index is up +0.62% this morning, partially rebounding from yesterday’s slump as bond yields pulled back, while investors digested a new round of corporate earnings reports. Industrial and mining stocks gained ground on Thursday. Data from the Federal Statistical Office released on Thursday showed that Germany’s annual producer prices rose less than expected in January. Meanwhile, investors remain focused on trade war developments and the ongoing situation in Ukraine. In corporate news, Schneider Electric Se (SU.P.DX) climbed over +5% after the electrical equipment maker posted record full-year sales and profits. Also, Anglo American (AAL.LN) rose more than +3% as investors reacted positively to the miner’s full-year results. At the same time, Mercedes-Benz Group Ag (MBG.D.DX) fell over -3% after reporting a 40% decrease in its car division’s 2024 earnings.

Germany’s PPI data was released today.

The German January PPI has been reported at -0.1% m/m and +0.5% y/y, weaker than expectations of +0.6% m/m and +1.3% y/y.

Asian stock markets today closed in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.02%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -1.24%.

China’s Shanghai Composite Index closed just below the flatline today. Technology stocks underperformed on Thursday. China kept benchmark lending rates steady at the monthly fixing on Thursday, as anticipated, to maintain financial stability. The one-year loan prime rate (LPR) remained at 3.10%, and the five-year LPR stayed unchanged at 3.60%, according to the People’s Bank of China. Meanwhile, U.S. President Donald Trump stated that a new trade deal with China is possible, signaling his willingness to prevent an escalating trade conflict between Washington and Beijing. In other news, Vice Minister Ling Ji stated at a briefing Thursday that the Commerce Ministry will visit foreign enterprises to better understand their needs and address their challenges. Investors are looking ahead to the “Two Sessions” meeting in early March for additional measures to bolster the economy. In corporate news, Meituan slumped over -6% in Hong Kong after the e-commerce company announced plans to expand social security benefits to additional workers.

Japan’s Nikkei 225 Stock Index closed lower today, hitting a more than 2-week low, as a stronger yen and uncertainties about U.S. tariff policy weighed on sentiment. Automobile and chip stocks led the declines on Thursday. Sentiment took a hit after U.S. President Donald Trump stated on Wednesday that he would announce tariffs on lumber, cars, semiconductors, and pharmaceuticals “over the next month or sooner.” Meanwhile, the yen hit its highest level against the dollar since December amid increasing speculation that the Bank of Japan will raise interest rates sooner rather than later. Former BOJ board member Makoto Sakurai told the Wall Street Journal that the central bank might hike interest rates in May - sooner than many anticipate - if it decides to act before the domestic political situation worsens and Trump’s tariffs trigger a shock. “June would be the most reasonable time to raise rates,” Sakurai noted. In other news, BOJ Governor Kazuo Ueda said on Thursday that he met with Prime Minister Shigeru Ishiba for a regular discussion on the economy and financial markets. Investors are awaiting Japan’s CPI report for January, set for release on Friday, to assess the nation’s economic outlook and potential impact on monetary policy. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +5.90% to 21.00.

Pre-Market U.S. Stock Movers

Carvana (CVNA) slumped over -8% in pre-market trading after the company reported a decline in gross profit per vehicle and lower wholesale volumes for the fourth quarter.

NXP Semiconductors (NXPI) gained more than +2% in pre-market trading after Citi upgraded the stock to Buy from Neutral with a price target of $290.

Roku (ROKU) rose over +1% in pre-market trading after Jefferies upgraded the stock to Hold from Underperform with a price target of $100.

Herbalife (HLF) surged over +17% in pre-market trading after the company posted upbeat Q4 results and announced a leadership transition.

Snowflake (SNOW) advanced more than +1% in pre-market trading after BTIG upgraded the stock to Buy from Neutral with a $220 price target.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Thursday - February 20th

Walmart (WMT), Booking (BKNG), Southern (SO), NetEase (NTES), Nu Holdings (NU), Copart (CPRT), Newmont Goldcorp (NEM), Cheniere Energy (LNG), Block (XYZ), Targa Resources (TRGP), Quanta Services (PWR), Live Nation Entertainment (LYV), Consolidated Edison (ED), VICI Properties (VICI), Cenovus Energy (CVE), CenterPoint Energy (CNP), Teck Resources (TECK), Insulet (PODD), Ryan Specialty Group Holdings (RYAN), Sprouts Farmers (SFM), Builders FirstSource (BLDR), Reliance Steel&Aluminum (RS), Fidelity Financial (FNF), Alliant Energy (LNT), Baxter (BAX), AMH 4 Rent (AMH), Akamai (AKAM), Insmed (INSM), EPAM Systems (EPAM), Somnigroup International (SGI), Rivian Automotive (RIVN), Comfort Systems (FIX), Gaming & Leisure Properties (GLPI), Lamar (LAMR), Pool (POOL), Texas Roadhouse (TXRH), Globus Medical (GMED), UL Solutions (ULS), Birkenstock Holding ltd (BIRK), Floor & Decor (FND), Dropbox (DBX), LKQ (LKQ), Frontier Communications Parent (FYBR), Glaukos Corp (GKOS), Hasbro (HAS), Bilibili (BILI), Repligen (RGEN), ESAB Corp (ESAB), HF Sinclair (DINO), WillScot A (WSC), Universal Display (OLED), Choice Hotels (CHH), FTI Consulting (FCN), Freshpet (FRPT), Guardant Health (GH), Celsius (CELH), IDACORP (IDA), Americold Realty (COLD), F G Annuities Life (FG), Wayfair Inc (W), Integer Hld (ITGR), Shake Shack Inc (SHAK), Dun And Bradstreet (DNB), Boise Cascad Llc (BCC), Core Natural Resources (CEIX), SpringWorks (SWTX), CarGurus (CARG), MP Materials (MP), IAMGold (IAG), iRhythm Tech (IRTC), Alight (ALIT), Resideo Tech (REZI), Five9 (FIVN), TransAlta Corp (TAC), Valaris (VAL), Laureate Education (LAUR), Alarm.com Holdings (ALRM), Cushman & Wakefield (CWK), Eldorado Gold (EGO), Ringcentral Inc (RNG), Trinity Industries (TRN), PagSeguro Digital (PAGS), Select Medical (SEM), Tripadvisor (TRIP), Dana (DAN), HNI (HNI), Vicor (VICR), Solaris Oilfield (SEI), Travere Therapeutics (TVTX), Garrett Motion (GTX), Century Aluminum (CENX), Digitalbridge Group (DBRG), Utz Brands (UTZ), Grail (GRAL), Endava (DAVA), Grid Dynamics (GDYN), eXp World (EXPI), Dynavax (DVAX), Perimeter Solutions (PRM), Innodata (INOD), Upbound (UPBD), First Majestic Silver (AG), World Fuel Services (WKC), Ardelyx Inc (ARDX), Indivior (INDV), Constellium Nv (CSTM), Centerra Gold (CGAU), Sabre Corpo (SABR), CRA (CRAI), Weave Communications (WEAV), Youdao (DAO), Pediatrix Medical (MD), Employers (EIG), Evolent Health Inc (EVH), NV5 Global (NVEE), Barings BDC (BBDC).