Market Summary
U.S. equities suffered a broad-based reversal on Thursday, giving back a significant portion of Wednesday’s rate-relief rally as rising oil prices and higher Treasury yields weighed on sentiment throughout the session. The S&P 500 fell 66.82 points (-0.87%) to close at 7641.16, the Nasdaq Composite dropped 263.92 points (-1.00%) to 26088.20, and the Dow Jones Industrial Average led the decline, sliding 703.84 points (-1.32%) to 52759.21. All three major averages finished at or near their session lows.
The primary catalyst was a nearly 3% surge in crude oil after President Trump threatened renewed economic measures against Iran, with Treasury Secretary Scott Bessent confirming a Monday press conference on what he called potentially the “greatest coordinated economic isolation in the history of the world.” That geopolitical pressure combined with a reversal of Wednesday’s Treasury-buyback-driven rate relief — yields moved higher across the curve — to create a difficult macro backdrop. Retail earnings added fuel to the selling, with Walmart’s disappointing Q3 guidance and Advance Auto’s DIY-driven comp miss dragging consumer-facing sectors sharply lower.
Sector rotation was pronounced: only energy and real estate closed higher, while consumer discretionary, consumer staples, and health care each fell nearly 2%. Technology proved the notable outlier to the downside pressure, with the sector down just 0.4% and the PHLX Semiconductor Index gaining 0.5% after two rough sessions. Crypto-linked names also bucked the trend, led by Coinbase on renewed optimism around the CLARITY Act. Small- and mid-caps underperformed as well, with the Russell 2000 down 1.3% and the S&P MidCap 400 off 0.9%.
Market Snapshot
| Index | Level | Change | % Change |
|—|—|—|—|
| Dow Jones | 52,759.21 | -703.84 | -1.32% |
| Nasdaq Composite | 26,088.20 | -263.92 | -1.00% |
| S&P 500 | 7,641.16 | -66.82 | -0.87% |
Breadth (NYSE): Advancers 918, Decliners 1,809, Volume 1.06 bln
Breadth (Nasdaq): Advancers 1,726, Decliners 3,223, Volume 8.29 bln
WaveFinder Breadth Metrics:
- Primary Sentiment: Very Bullish (Bulls 1,147 | Bears 784)
- 4% Sentiment: Bearish (Bulls 82 | Bears 207)
- 40 SMA Sentiment: Bearish
- Stocks Above 20-day SMA: 36%
- Stocks Above 40-day SMA: 49.63%
- 9-Month Bulls/Bears: 15 / 15 (Bull Follow-Through: 29.63%)
YTD Performance: Russell 2000 +20.6% | S&P MidCap 400 +15.3% | Nasdaq Composite +12.2% | S&P 500 +11.6% | DJIA +9.8%
Sector Performance
| Rank | Sector | Performance |
|—|—|—|
| 1 | Energy | +0.4% |
| 2 | Real Estate | +0.2% |
| 3 | Information Technology | -0.4% |
| 4 | Industrials | -1.2% |
| 5 | Consumer Discretionary | -1.8% |
| 6 | Consumer Staples | -1.9% |
| 7 | Health Care | -1.9% |
| — | Communication Services | Weak (no specific % provided) |
| — | Financials | Weak (no specific % provided) |
| — | Utilities | Weak (no specific % provided) |
| — | Materials | Not specified |
Volatility Watch (WaveFinder ATR): Energy (3.82%, rising, P100) and Health Care (3.25%, flat, P100) showed the highest volatility readings, consistent with today’s news-driven swings in oil-sensitive and pharma/biotech names. Communication Services also registered elevated volatility (2.25%, rising, P100). Technology (-1.19%) and Utilities (-1.33%) showed the most compressed/falling volatility profiles.
Key Earnings & Movers
Decliners:
- Advance Auto (AAP): $42.39, -$13.79 (-24.55%) — Q2 EPS beat ($1.03, aided by $0.31 tariff-refund benefit), but comps fell -0.5% vs. a strong Q1, driven by weakening DIY demand
- Walmart (WMT): $103.84, -$10.46 (-9.15%) — Q2 beat on EPS and revenue ($187.9 bln, +5.9% yr/yr), but Q3 EPS guidance of $0.62-0.64 marked third straight quarter of downside guidance
- Moderna (MRNA): $133.32, -$41.06 (-23.55%) — giving back a portion of prior day’s cancer-vaccine rally
- Intuitive Surgical (ISRG): $374.48, -$23.24 (-5.84%)
Advancers:
- Deere (DE): $620.94, +$40.31 (+6.94%) — post-earnings strength
- Nordson (NDSN): $334.70, +$24.78 (+8.00%) — post-earnings strength
- Coinbase Global (COIN): $172.35, +$12.15 (+7.58%) — rallied on Trump’s push for Congress to pass the CLARITY Act
- Ross Stores: Headed higher on a beat-and-raise report (specific figures not disclosed)
ETF/Index Moves: iShares U.S. Home Construction ETF -2.5%; iShares U.S. Aerospace & Defense ETF -3.6%; Vanguard Mega Cap Growth ETF -0.9%; PHLX Semiconductor Index +0.5%
Stock Spotlight
Walmart (WMT) was the day’s most consequential mover, closing at $103.84, down $10.46 (-9.15%), despite delivering a headline earnings beat. Q2 (July) adjusted EPS topped estimates and revenue rose 5.9% yr/yr (+5.1% constant currency) to $187.9 billion. However, the stock’s steep decline reflects a disconnect between the strong quarter and a disappointing forward outlook. Walmart US comps (ex-fuel) rose just 2.6%, down from 4.1% in Q1, with management citing weaker health and wellness sales — pharmacy deflation tied to new maximum fair price regulation created a 125-basis-point comp headwind. The company deployed more than 11,000 rollbacks during the quarter, up sharply from 7,200 at the end of Q1, as it leaned into price investment amid rising consumer pressure from fuel costs exceeding $4/gallon.
The more significant concern for investors was Q3 guidance: adjusted EPS of $0.62-0.64 and constant-currency revenue growth of 3.00-3.75%, representing a meaningful deceleration from Q2’s 5.1% CC growth pace and marking the third consecutive quarter of downside EPS guidance from the retail giant. While Sam’s Club US comps (+4.4%) and International sales (+12.8% yr/yr) showed continued strength, the softening core Walmart US business and cautious outlook overshadowed the otherwise solid quarter, dragging the broader consumer staples sector down 1.9% on the session.
Bond Market & Treasuries
Treasuries retreated across the curve Thursday, reversing much of the gain recorded after Wednesday’s Treasury buyback announcement. The 10-year note settled -9/32, with yield up 4 basis points to 4.696-4.70%.
| Tenor | Change | Yield |
|—|—|—|
| 2-yr | +1 bp | 4.19% |
| 3-yr | +2 bps | 4.27% |
| 5-yr | +3 bps | 4.39% |
| 10-yr | +4 bps | 4.70% |
| 30-yr | +4 bps | 5.24% |
Key drivers: Climbing crude oil overnight (tied to a hijacked tanker in the Gulf of Aden and Trump’s Iran warnings) pressured Treasuries from the open. A brief recovery attempt followed Bessent’s CNBC comments that longer-tenor buybacks could exceed the new $4 billion ceiling announced a day earlier, but the bounce failed to hold, leaving yields near session-starting levels into the close. The U.S. Dollar Index edged up 0.1% to 98.91.
Commodities
| Commodity | Change | Level |
|—|—|—|
| Crude Oil (WTI) | +$2.47 (+2.9%) | $88.15/bbl |
| Natural Gas | -$0.08 | $2.73 |
| Gold | +$23.80 (+0.5%) | $4,569.60/ozt |
| Silver | +$2.29 | $68.1 |
| Copper | -0.5% | $6.47/lb |
Oil’s climb to a near four-week high was the day’s dominant commodity story, driven by escalating geopolitical tension with Iran and a hijacked tanker in the Gulf of Aden, both of which rippled through equity and bond markets.
Overseas Markets
Asia: Nikkei +1.4%, Hang Seng +0.8%, Shanghai +0.2% — Asian markets posted broad gains overnight, though the strength failed to carry into European trading.
Europe: DAX -0.3%, FTSE flat, CAC -0.6% — Most major European bourses traded in the red, pressured by the same oil/rate dynamics weighing on U.S. futures.
Currencies: USD/JPY +0.7% to 159.16; EUR/USD unchanged at 1.1673; GBP/USD +0.1% to 1.3626; USD/CNH unchanged at 6.7262.
Economic Data
- August Philadelphia Fed Index: 47.4 (Briefing.com consensus 25.0; prior 41.4) — a sharp acceleration in regional manufacturing activity
- Weekly Initial Claims: 206K (consensus 206K; prior revised to 212K from 209K)
- Weekly Continuing Claims: 1.799 mln (prior revised to 1.781 mln from 1.777 mln)
- July Leading Economic Index: +0.2% (consensus -0.1%; prior revised to -0.1% from -0.2%)
Takeaway: Despite upticks in four-week moving averages for both initial and continuing claims, overall labor market levels remain far from signaling a meaningful increase in layoff activity. The blowout Philly Fed print and positive LEI revision were largely overshadowed by the oil/rate-driven risk-off tone.
Looking Ahead
- Friday, Aug 21, 9:45 ET: Flash S&P Global U.S. Manufacturing PMI (prior 53.9) and Flash Services PMI (prior 54.6)
- Monday, Aug 24: Treasury Secretary Bessent press conference on additional economic measures against Iran, described as a potential “coordinated economic isolation” campaign
- Markets will continue monitoring crude oil’s trajectory amid escalating Iran tensions and Treasury yield direction following this week’s buyback-driven volatility
- Retail earnings season continues to be a focal point after mixed reactions to Walmart and Advance Auto reports, with Ross Stores providing a beat-and-raise counterpoint