February 20, 2025, After the Bell

U.S. stocks took a dramatic dive on Thursday as ongoing tariff worries and a downbeat forecast from Walmart (WMT) shook up investor confidence!

A massive selloff sent all three major U.S. stock indexes tumbling into the red, with the Dow Jones Industrial Average leading the charge downward. The S&P 500's streak of record closing highs came to an abrupt halt!

Gold prices soared to an all-time high, signaling a rush to safety amid rising uncertainties.

Walmart (WMT), the world's largest retailer, unveiled sales and profit forecasts for the current fiscal year that fell short of analysts' expectations, hinting at a possible dip in consumer demand.

"With consumer spending making up 70% of the U.S. economy, Walmart's (WMT) weak guidance sparked worries about consumer health and future spending," declared Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

"This likely triggered selling pressure on Walmart (WMT) shares, impacting the broader market," Pavlik added.

Walmart's (WMT) shares ended the day significantly lower.

The company's results also shed light on its expected performance amid President Donald Trump's expanding tariff announcements.

On Wednesday, the tariff list was expanded to include lumber, automobiles, semiconductors, and pharmaceuticals.

"You can't talk about uncertainty without mentioning tariffs, right? It's been a hot and volatile topic," remarked Mike Dickson, head of research at Horizon Investments in Charlotte, North Carolina.

"Is Trump using this as a negotiation tactic? Is he serious? Who will be impacted? We've seen a lot of this," he continued.

Recent economic indicators, like jobless claims and factory activity in the Atlantic region, suggest the U.S. economy is still going strong for now, in line with recent statements by Federal Reserve officials.

However, some economists are worried about potential labor market disruptions due to the recent dismissal of thousands of federal employees by Elon Musk's Department of Government Efficiency (DOGE).

The S&P 500 dropped 26.52 points, or 0.43%, closing at 6,117.63 points, while the Nasdaq Composite slipped 94.22 points, or 0.47%, to 19,962.03. The Dow Jones Industrial Average tumbled 450.69 points, or 1.00%, to 44,180.80.

Palantir Technologies (PLTR), known for providing software to visualize military positions to governments, fell after the Pentagon's announcement on Wednesday about potential budget cuts for fiscal year 2026.

U.S.-listed shares of Alibaba Group climbed after the Chinese e-commerce giant surpassed third-quarter revenue expectations.

Hasbro (HAS) surged after the toymaker beat quarterly profit and revenue estimates.

Medical device manufacturer Baxter International (BAX) rose on the heels of the company's better-than-expected profit forecast for 2025.