10 things to watch in the stock market Thursday including Walmart earnings and rate cut hopes

Markets are poised for a lower open, with the S&P 500 extending a four-day losing streak, as Federal Reserve minutes indicate a potentially more hawkish stance from Chair Powell at Jackson Hole and tariff-induced price increases signal persistent inflation pressures. Amid this macro backdrop, Walmart reported mixed Q2 results but strong same-store sales, while Meta implemented an AI hiring freeze to revamp its internal team structure. Meanwhile, Nvidia and TJX Companies received price target upgrades following positive outlooks and performance.

Analysis

The market is exhibiting a cautious tone, with the S&P 500 on a four-day losing streak and futures pointing to a lower open, driven by concerns over a potentially more hawkish Federal Reserve. Minutes from the last Fed meeting suggest Chair Powell may adopt a firm stance at Jackson Hole, slightly reducing market expectations for three rate cuts by year-end, according to the CME FedWatch Tool. This macroeconomic uncertainty is compounded by tangible signs of tariff-induced inflation, as companies like Pepsi, Sony, and Nikon announce price hikes. On a corporate level, Walmart's (WMT) mixed results highlight a key theme: while earnings missed for the first time in three years, a 4.6% jump in same-store sales and a raised full-year outlook suggest its value proposition is attracting inflation-wary consumers. In the tech sector, there is clear divergence; Meta (META) has initiated a hiring freeze for AI talent, raising concerns about stock-based compensation costs, whereas Nvidia (NVDA) is seeing bullish sentiment with price target increases from UBS and Wedbush ahead of earnings. Similarly, Hewlett Packard Enterprise (HPE) received an upgrade from Morgan Stanley, citing undervalued shares and accretive benefits from its Juniper acquisition. The off-price retail segment shows strength, with TJX Companies (TJX) earning multiple price target hikes following a strong quarter and upgraded guidance.

Key Decisions for Investors

• Monitor Fed Chair Powell's Jackson Hole speech for confirmation of the hawkish tone, as this will be a primary catalyst for near-term market direction and rate cut probabilities.
• Evaluate positioning within the retail sector, favoring value-oriented discounters like TJX which are demonstrating pricing power and strong consumer demand amidst inflationary pressures over retailers with less clear value propositions.
• Be selective in technology holdings; while Nvidia shows strong pre-earnings momentum and HPE presents a value case, Meta's AI hiring freeze and rising stock-based compensation costs warrant scrutiny.
• Assess portfolio exposure to companies sensitive to tariffs and inflation, paying close attention to whether they are absorbing costs, like Walmart, or successfully passing them on, like Pepsi and Sony, as this will directly impact margins.