Stocks fell on Thursday, but losses were pared after an early sell-off.
The major averages remained in negative territory, though they recovered from their session lows.
The S&P 500 dropped as much as 1% in early trading but finished the day down 26.63 points, or 0.4%, at 19,962.36. The index had hit record highs in the past two sessions.
The Nasdaq also lost 93.89 points, or 0.5%, to close at 19,962.36 after falling as much as 1.3% earlier in the session.
The Dow saw a steeper decline, sliding 450.94 points, or 1.0%, to 44,176.65, dragged lower by a sharp sell-off in Walmart shares.
Walmart stock plunged 6.5% after the company posted strong fiscal fourth-quarter earnings but issued disappointing guidance for the current year.
Target and Costco each declined about 2%, following Walmart’s move, as concerns over the sustainability of earnings growth weighed on investor sentiment.
On the economic front, the Labor Department reported a modest rise in weekly jobless claims, with initial claims increasing to 219,000 from the previous week’s revised 214,000. Economists had expected 215,000 claims.
Big movers: Walmart, Palantir and Alibaba
Walmart shares fell about 6% as the retail giant projected slower profit growth despite continued sales strength.
While revenue and e-commerce sales saw solid gains, the company’s full-year earnings forecast of $2.50 to $2.60 per share fell short of analyst expectations of $2.76.
For the first quarter, Walmart guided for adjusted earnings per share between 57 and 58 cents, down from 60 cents a year ago.
The retailer expects net sales to rise 3% to 4% for the year, with a 1.5 percentage point headwind from its Vizio acquisition and the impact of 2024’s leap year.
Palantir shares extended their sharp sell-off, dropping around 6% on Thursday following a 10% decline on Wednesday—its worst trading day since May.
The stock had recently hit an all-time high before reversing sharply.
The decline came after reports that U.S. Defense Secretary Pete Hegseth has instructed Pentagon officials to prepare for 8% annual budget cuts over the next five years, raising concerns over government contracts for defense tech firms like Palantir.
Additionally, investor sentiment was dampened by news that CEO Alex Karp plans to sell up to 10 million shares over the next six months.
Alibaba posted strong earnings for the December quarter, with profit reaching 48.9 billion yuan ($6.7 billion), driven by growth in its international e-commerce business and AI expansion.
Revenue rose 8% year-over-year to $38.38 billion, beating analyst expectations of $38.23 billion.
Adjusted earnings per share came in at $2.93, above market forecasts of $2.67. CEO Eddie Wu highlighted the company’s progress on its “user-first, AI-driven” strategies and the re-acceleration of core business growth.
Alibaba shares surged 8% Thursday, adding to a more than 45% gain on both the New York and Hong Kong exchanges since the start of the year.
Microsoft’s chip supercharges quantum computing stocks
Microsoft announced a major advancement in quantum computing with the unveiling of its Majorana 1 chip, driving shares of quantum computing companies higher on Thursday.
The breakthrough, part of Microsoft’s 17-year research effort, aims to accelerate the development of large-scale quantum computers.
Following the announcement, shares of quantum computing companies gained, with D-Wave Quantum rising 13%, Rigetti Computing up 3.99%, and Quantum Computing advancing 3.60%.
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