Wall Street closed lower on Thursday, pulled down by utilities and consumer stocks. Investors continued to grow further cautious, worried that Fed chair Jerome Powell might deliver hawkish comments on Friday that could fuel market volatility. Unexpectedly high initial jobless claims reported for the week also weighed on the markets. All three benchmark indexes closed in the red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.3%, or 152.81 points, to close at 44,785.50. Twenty-three components of the 30-stock index ended in negative territory, while seven ended in positive.
The tech-heavy Nasdaq Composite slid 72.54 points, or 0.3%, to close at 21,100.31.
The S&P 500 lost 25.61 points, or 0.4%, to close at 6,370.17. Nine of the 11 broad sectors of the benchmark index closed in the red. The Consumer Staples Select Sector SPDR (XLP), the Utilities Select Sector SPDR (XLU) and the Consumer Discretionary Select Sector SPDR (XLY) declined 0.9%, 0.7% and 0.6%, respectively, while the Energy Select Sector SPDR (XLE) advanced 0.7%.
The fear gauge CBOE Volatility Index (VIX) increased 5.8% to 16.60. A total of 12.28 billion shares were traded on Thursday, lower than the last 20-session average of 17.08 billion. Decliners outnumbered advancers by a 1.6-to-1 ratio on the NYSE.
Jackson Hole Worries Cast a Pall Over Investor Mood
Investor sentiment continued to be cautious on Thursday as Wall Street braced for Fed Chair Jerome Powell’s closely awaited remarks at the Jackson Hole symposium. With the S&P 500 marking its fifth consecutive decline and both the Dow and Nasdaq retreating in the session, markets reflected growing uncertainty about the Fed’s next move.
At the core of the trepidation lies Powell’s much-awaited keynote speech at Jackson Hole, slated for Friday, which carries the potential to reshape expectations for the Fed’s policy path. The anticipation surrounding Powell’s remarks created a tense atmosphere, as traders tried to gauge whether the central bank would signal a firmer commitment to keeping rates higher for longer. Expectations for a September rate cut, once considered almost certain, had eased in recent days as economic data painted a mixed picture. Rising bond yields underscored the shifting mood, pressuring equity markets that had grown reliant on the prospect of monetary easing.
The focus now turns squarely to Powell’s speech, widely seen as the most significant event of the week. Any hint of hawkishness could unsettle equities further, while even neutral commentary might still be interpreted as limiting the scope for aggressive rate cuts this year. With volatility risks elevated, many investors opted to stay on the sidelines, awaiting clarity on whether the Fed will prioritize inflation control or lean toward supporting growth. Utilities and consumer stocks suffered the most in the session.
Walmart Earnings Miss Weighs on the Retail Sector
Retail giant Walmart Inc.’s WMT second-quarter fiscal 2026 earnings of 68 cents per share jumped 1.5% from the year-ago period’s 67 cents, but missed the Zacks Consensus Estimate of 73 cents. The company’s earnings performance dragged the retail sector lower with it and flagged rising tariff-related costs. Its stocks fell 4.5% in the session.
Consequently, shares of Target Corporation TGT and Dollar General Corporation DG fell 1.7% and 2.1%, respectively. Both currently carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
For the week ended Aug. 16, initial jobless claims came in at 235,000, an increase of 11,000 from the previous week's unrevised level of 224,000. The 4-week moving average was 226,250, an increase of 4,500 from the previous week's unrevised average of 221,750.
Continuing claims for the week ending Aug. 9 were 1,972,000, an increase of 30,000 from the previous week's revised level. This is its highest level since Nov. 6, 2021 when it was 2,041,000. The previous week's level was revised down by 11,000 from 1,953,000 to 1,942,000. The 4-week moving average was 1,954,500, an increase of 6,500 from the previous week's revised average. The previous week's average was revised down by 2,750 from 1,950,750 to 1,948,000.
Per the National Association of Realtors, existing home sales for July increased to 4.01 million units. The number for June remained unrevised at 3.93 million units.
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Target Corporation (TGT): Free Stock Analysis Report Walmart Inc. (WMT): Free Stock Analysis Report Dollar General Corporation (DG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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