Market participants took a cautious stance in Thursday's session, with all eyes on Federal Reserve Chair Jerome Powell's Friday morning speech at the Jackson Hole Economic Symposium.
While the major stock indexes traded modestly lower throughout the day, there were more notable moves beneath the surface.
It's unclear at this point what Powell will say in his Jackson Hole speech, but Wall Street is hoping for hints of a September rate cut.
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Odds for a quarter-point cut shot higher following the July jobs report, which came in much weaker than anticipated. But a recent batch of mixed inflation data has lowered expectations in the past few weeks.
As of August 21, CME Group FedWatch shows futures traders are pricing in a 73.5% chance the central bank will cut the federal funds rate by 0.25% at its meeting next month – down from 92.1% one week ago.
Powell's messaging at Jackson Hole has the potential to move markets, says José Torres, senior economist at Interactive Brokers.
An emphasis on price pressures and tariffs rather than hiring and unemployment "can disappoint investors during this weak seasonal period," Torres notes, while "an acknowledgement from Powell of the restrictive policy stance and the need to resume the FOMC's walk down the stairs can bolster animal spirits."
Today, the main indexes made modest moves to the downside. At the close, the S&P 500 was off 0.4% to 6,370, its fifth straight loss. The Nasdaq Composite fell 0.3% to 21,100, and the Dow Jones Industrial Average gave back 0.3% to 44,785.
Walmart slumps on first profit miss in years
Walmart (WMT) was hands down the worst Dow Jones stock today, slumping 4.5% after the mega-retailer reported a rare earnings miss.
While Walmart's revenue of $177.4 billion for its fiscal 2026 second quarter came in higher than expected, its earnings per share of 68 cents missed estimates.
This marked the first time since April 2022 that the retailer has fallen short on the bottom line, but Brian Mulberry, senior portfolio manager at Zacks Investment Management, says this due to one-off charges including state legal fees and higher insurance costs.
"That has nothing to do with higher goods prices that may be caused by tariffs," he adds. "In fact WMT said they only saw about 1% higher costs and have absorbed almost all those costs. This should help ease the tariff uncertainty, along with a stronger forward guidance on both top and bottom line expectations."
Meta initiates AI hiring freeze
Meta Platforms (META) was another notable mover Thursday, falling 1.2% after a report in The Wall Street Journal indicated the Facebook parent has frozen hiring in its artificial intelligence (AI) after months of rapid-fire recruitment.
According to the WSJ, this coincides with a broader restructuring if its AI division. That this marks the fourth time in six months the company has reorganized the department could potentially raise concerns, but BofA Securities analyst Justin Post says investors shouldn't be too concerned.
"While reshuffling may raise concerns on Meta's AI execution, the AI opportunity is still very early, and Meta has a track record of execution around new services," the analyst explains. "We continue to see Meta as well positioned for AI given massive user based and tech."
Post has a Buy rating on the communication services stock, and he's in good company. Of the 67 analysts covering Meta who are tracked by S&P Global Market Intelligence, 48 say it's a Strong Buy, nine have it at Buy, nine say it's a Hold and one has it at Sell.
This works out to a consensus Strong Buy recommendation.
Cracker Barrel stock sinks on logo change
One of the more brow-raising stock movers of the day was Cracker Barrel Old Country Store (CBRL), which plummeted 7.2% as the country-themed restaurant chain's decision to change its logo sparked backlash.
The move is part of a "strategic transformation" for the restaurant that began in May 2024, but Cracker Barrel's decision to simplify its logo has found some critics.
"CBRL is effectively an 'anti-meme' stock today," says Interactive Brokers Chief Strategist Steve Sosnick. "One of the features of the original meme stocks, as opposed to the recent fleeting, one-day wonders, was the nostalgia and enthusiasm associated with GameStop (GME), AMC Entertainment (AMC) and others."
Cracker Barrel fits the bill, Sosnick adds, "and the social media outrage is certainly resonating with a big piece of its customer base."
Heading into Thursday's session, the consumer discretionary stock was handily outperforming the broader market for the year to date, up 13.3% vs the S&P 500's 9.6% return.
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