Economist's Insights

Today’s Trading Activity – Walmart, Higher Rates Weigh Broadly on U.S. Equities

Feb 20, 2018

U.S. stocks ended a day of back-and-forth trading on a sour note as the major equity indexes fell for the first time in seven sessions. Tuesday’s weakness was counter to strength seen in Europe but consistent with the pre-market tone in futures trading that presciently portrayed demise of stocks’ recent win streak. Walmart Inc. accounted for 73 of the Dow’s 255-point decline and helped push the consumer staples sector to the bottom of the S&P. The U.S. retail giant dropped 9.9%, its worst day since October 2015, after reporting its first earnings miss in more than two years and a disappointing result for its e-commerce business. But the daily drop was more far-reaching than Walmart’s woes as losses in nine of the 10 remaining sectors offset gains in the tech sector. Higher rates remained a story to start the week, although the equity weakness capped how far yields would climb. The 2-year yield closed up 2.9 bps tat 2.22% while the 5-year yield added 1.6 bps to 2.65% and the 10-year yield tacked on a smaller 1.3 bps to end at 2.89%.