Wall Street is still on edge as the third earnings season of 2026 winds down. Walmart (WMT -2.66%) beat on revenue, beat on earnings, and raised its full-year guidance. The stock promptly fell about 10%. Welcome to earnings season in 2026, where beating the numbers doesn't seem to be the point these days.
The S&P 500 (^GSPC -0.02%) is down 0.29% as of 11:44 a.m. ET, the Dow Jones Industrial Average (^DJI -0.31%) has fallen 0.64%, and the Nasdaq Composite (^IXIC +0.01%) is off 0.80%. Twenty of the Dow's 30 components are lower.
Walmart's earnings beat comes with a warning
Let's start in Arkansas. Retail giant Walmart posted Q2 results on Thursday morning, beating Wall Street's estimates across the board and raising full-year guidance targets. But the stock fell 9.8% anyway, adding up to a 21.3% drop over the last three months. You see, Walmart's domestic comparable sales grew just 2.6%, well short of the roughly 3.7% analysts expected and the slowest pace since Q4 2020. And roughly $2.9 billion of the quarter's earnings surprise came from tariff refunds rather than core operations.
You may hear echoes of Home Depot's (HD -1.53%) market-moving report in this update. U.S. consumer spending is slowing after the spring's generous tax refund boost. Walmart's own management noted shoppers are making trade-offs amid high fuel costs. Walmart's $114 share price makes it one of the lightest weights on the Dow, but today's massive drop still resulted in the second-largest score change on the index. With a $826 billion market cap, it also weighed heavily on the S&P 500 and Nasdaq indexes.
Image source: Getty Images.
The macro trends didn't help, either. Oil prices are up by roughly 3% as the United Arab Emirates suspended all financial transactions with Iran. 30-year Treasury yields are hanging on to yesterday's multi-decade high. Treasury Secretary Scott Bessent went on TV to announce bigger buybacks of long-dated debt while admitting liquidity there is "very poor."
The gloom isn't completely universal, though. Deere (DE -2.05%) rose 9.4% on another beat-and-raise report, and the memory chip bellwethers are up by a few percent today. Micron Technology (MU +0.81%) rose 1.8% while SK Hynix (SKHY -1.54%) gained 3.7%. There's still room for optimism in this anxious market climate.
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Key Data Points
A tired consumer meets rising rates
Step back and the week has a clear message. Three big retail-adjacent reads (Home Depot, July retail sales, and now Walmart) all say the same thing: Americans are spending more carefully. That's the demand side of the economy losing a step.
That matters because bond yields are simultaneously near their highest levels since before the 2008 financial crisis. The combo of cautious consumer spending and higher financing costs points to a slowing economy. Bessent stepping in with bond buybacks tells you the long-term picture is under real strain.
