US stock futures stall after recent gains, Walmart’s disappointing outlook

By Shashwat Chauhan and Twesha Dikshit

Feb 19 (Reuters) – U.S. stock index futures dipped on Thursday, following a three-day winning streak for the S&P 500, as heavyweight technology stocks slipped and Walmart’s conservative outlook dampened sentiment.

Walmart forecast annual sales and profit below Wall Street expectations, sending its shares down 3% in premarket trading. The company became the first U.S. retailer to exceed $1 trillion in market value this month.

Other megacap and growth stocks, including Apple, Nvidia and Meta Platforms, traded lower after rising in the previous session.

All three main U.S. indexes ended higher on Wednesday, as heavyweights including Nvidia and Amazon.com and other technology-related stocks, had risen following recent jitters surrounding artificial intelligence.

Broader AI-linked and megacap technology stocks faced turbulence earlier this month amid concerns over high valuations and limited evidence that significant investments in AI were driving revenue and profit growth.

Sectors ranging from software to trucking were also hit by mounting concerns that rapidly improving AI tools could disrupt their business models.

“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,” Tom Nelson, Franklin Templeton’s head of market strategy, said in a note.

At 07:15 a.m. ET, Dow E-minis were down 131 points, or 0.26%, S&P 500 E-minis fell 16.25 points, or 0.24%, and Nasdaq 100 E-minis were down 97.5 points, or 0.39%.

In earnings-related moves, DoorDash climbed 9.9% after the food delivery company forecast first-quarter marketplace gross order value above Wall Street estimates.

EBay rose 9.2% after the company forecast first-quarter revenue above analysts’ estimates and announced the acquisition of fashion marketplace Depop from Etsy. Etsy shares jumped 19%.

Carvana dropped 14.5% after the online used-car retailer missed fourth-quarter profit estimates on higher costs.

WHAT THE FED THINKS

Meanwhile, minutes from the U.S. Federal Reserve’s most recent policy meeting released on Wednesday showed policymakers were in near-unanimous agreement to hold interest rates steady.

Policymakers, however, remained split about the policy path later this year, with “several” open to rate hikes if inflation remains elevated, while others were inclined to support further cuts if it recedes in line with expectations.

At least four central bank officials, including Chicago Fed President Austan Goolsbee and Fed Vice Chair for Supervision Michelle Bowman, are scheduled to speak during the day.

A reading of weekly jobless claims is also due later on Thursday. The personal consumption expenditure report – the Fed’s preferred inflation gauge – is due on Friday.

In other stocks, Hims & Hers shares added 7.5% after the telehealth firm said it would acquire Australian digital health company Eucalyptus for up to $1.15 billion.

Exxon Mobil and Chevron climbed over 1% each as crude oil prices rose on mounting fears of a military conflict between the United States and Iran.

Occidental Petroleum climbed 4.6% after the U.S. shale producer beat fourth-quarter profit expectations.

(Reporting by Shashwat Chauhan and Twesha Dikshit in Bengaluru; Editing by Pooja Desai and Shinjini Ganguli)