Stocks at highs, but Walmart…

Major US equity indices, including the Nasdaq and S&P 500, and European equity indices, including the DAX, CAC and Stoxx 600, recorded new all-time highs mid-week, buoyed by positive market sentiment.

However, Walmart's below-expected results, uncertainty surrounding the conflict in Ukraine and doubts about the outcome of the German elections penalized the markets, causing a retreat. With revenue of almost 700 billion euros, around 2.5% of the nominal GDP of the USA, Walmart warned of a more difficult 2025, with sales and profit growth below forecasts.

The company attributes this outlook to growing consumer concerns about inflation and government tariffs. Despite continuing to perform well, the slowdown in consumption is a worrying sign for the U.S. economy, given that consumption accounts for two-thirds of the country’s GDP. Inflation, especially in food prices, and tariffs on imports have directly affected consumer sentiment, which is becoming more cautious. This weakening in consumption could negatively impact U.S. GDP, which relies heavily on household spending.

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