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The U.S. consumer isn’t okay.
Unfortunately, that’s what Walmart’s latest guidance is signaling.
While the company posted inline EPS of 66 cents and revenue of $177.75 billion—up 7.3% year over year and ahead of expectations, the strength in revenue is being driven less by discretionary retail demand and more by necessity-based spending—particularly groceries and household essentials.
So, sure, consumers are still spending, but they are trading down, prioritizing essentials.
For the second quarter, Walmart expects adjusted EPS of $0.72 to $0.74, with a midpoint of $0.73, which is below estimates of $0.75. For fiscal 2027, the company reiterated its full-year adjusted EPS guidance of $2.75 to $2.85, with a midpoint of $2.80, which is below estimates of $2.92.
Walmart also noted that higher-income shoppers continue trading down to discount retailers, a trend that has accelerated over the past year. All of which is raising big concerns about the true health of consumers and the economy.
Quantum computing stocks are on the move, following reports that the U.S. government will award $2 billion in grants to nine quantum firms.
In fact, according to The Wall Street Journal, the Trump Administration is awarding grants to companies, which include U.S. government equity stakes. According to the Journal, the move is part of the administration’s plans to boost the nascent industry, which is attracting substantial interest from investors and businesses.
The rollercoaster ride continues.
At the moment, the S&P 500 is down 0.36%, or by 27 points. The SPDR S&P 500 ETF (SPY | SPY Price Prediction) is down 0.24%, or by $1.78. The Dow is down 0.31%, or by 166 points. The Nasdaq is down 0.55%, or by 156 points. Oil is up by $2.86 at $101.14. Gold is down by $20 at $4,512.
Just yesterday, markets exploded higher on lower Treasury yields and lower oil prices. Today, Treasury yields are up, and oil is gushing $2.45 higher because of the war. Not helping, the Supreme Leader of Iran says enriched uranium must stay in Iran.
As noted by Reuters, “Israeli officials have told Reuters that Trump has assured Israel that Iran’s stockpile of highly enriched uranium needed to make an atomic bomb will be sent out of Iran and that any peace deal must include a clause on this. Israel’s top officials, the sources said, believe that sending the material abroad would leave the country more vulnerable to future attacks by the United States and Israel.”
All of which raises concerns that the war is far from over.
Market Movers: Nvidia Crushed Earnings
Last night, Nvidia (NASDAQ: NVDA) saw adjusted EPS of $1.87, as revenue exploded 85% year over year to $81.61 billion. Analysts had expected the company to earn an adjusted $1.75 per share on $79.19B in revenue.
Data center revenue came in at $75.2 billion, as compared to estimates of $73.48 billion. Edge Computing revenue was $6.4 billion, up 29% year-over-year. Adjusted gross margin came in at 75% for the quarter, in line with estimates. NVDA also generated $48.55 billion.
Moving forward, Nvidia expects revenue to be $91 billion, plus or minus 2%. The company also said that it does not expect any revenue from China for the period. Analysts had expected the company to generate $87.3 billion in revenue. Nvidia also added $80 billion to its share buyback program. And it raised its quarterly dividend to $0.25 per share, up from a prior $0.01 per share, which is payable to shareholders of record on June 4 on June 26.
Still, despite that news, NVDA slipped, with analysts saying investors “have got used to Nvidia delivering stellar results and amid some concerns that it will face growing competition,” as noted by the BBC. “Nvidia represents 8% of the S&P 500. Unless there’s a belief in this continued parabolic growth, it’s difficult for investors to get super excited, although Nvidia posted outstanding numbers.”
Market Movers: Walmart Slips on Earnings Miss
Shares of Walmart (NASDAQ: WMT) are down after issuing a worse-than-expected outlook for the full year and current quarter. The retailer said it’s expecting 2027 adjusted earnings per share to be between $2.75 and $2.85, lower than expectations of $2.91. It also anticipates that net sales will rise between 3.5% and 4.5% for the year.
For the current quarter, it expects adjusted earnings per share to be between 72 cents and 74 cents, missing expectations of 75 cents. Walmart anticipates net sales will climb 4% to 5% for the quarter. All as consumers deal with sticky inflation, war, and higher oil prices.
All of which raises concerns about the real health of the U.S. consumer.
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