Walmart’s stock price fell 3.1 percent by market closed
US: Walmart’s value dropped by billions on Tuesday as research showed that American shoppers had a pessimistic view of the economy.
According to Companiesmarketcap.com, Walmart’s market capitalization dropped by $21.89 billion on Tuesday as a consequence of a 3.1 percent decline in its share price at market close.
As Walmart’s CEO recently warned, people are already displaying symptoms of cutting down on their spending, so if confidence doesn’t improve and the nation continues on its course toward an economic slump, the retail industry may be severely impacted. Given that consumer spending is thought to be responsible for more than two-thirds of the nation’s GDP, persistently low confidence may raise the likelihood of a recession in the near future.
The biggest valuation reduction on Tuesday was Walmart’s $22 billion loss, followed by chipmaker Nvidia, whose share price fell by 0.6 percent, resulting in a $17 billion dip in its total market value.
The Conference Board’s monthly assessment on American consumer confidence showed another alarming dip at the same time as the retail behemoth’s downturn.
For the fourth consecutive month, the Consumer Confidence Index declined to 92.9 points in March, the lowest level since early 2021.
A gauge of consumers’ expectations for income, business, and labor market conditions in the near future, the Expectations Index dropped to 65.2, its lowest level in 12 years, and below the 80-point threshold that the think tank said “usually signals a recession ahead.”
While consumers’ assessment of their present financial status improved somewhat, their projections of a recession in the next 12 months were the same from February. But the six-month forecast for their family’s financial status fell to its lowest point in almost two years.
In late February, Doug McMillon, the CEO of Walmart, observed that “budget-pressured” consumers were cutting down on their purchases and exhibiting “stressed behaviors.”
“You can see that the money runs out before the month is gone; you can see that people are buying smaller pack sizes at the end of the month,” McMillon said.
“The klaxon of layoff headlines, a falling stock market, and tariff fears were a big blow to consumer confidence in early March,” said Bill Adams, chief economist at Comerica Bank, in remarks given to Newsweek after the consumer confidence survey.
“The pullback in confidence is becoming a real threat to consumer spending, which, as is often repeated, accounts for two-thirds of U.S. economic activity.”
“Downside risks to the economic outlook have increased substantially over the last month,” he said. “Those who fear that the economy is in a deep hole won’t go on vacation, go out to dine, or purchase new homes or automobiles. The economy may suffer a significant blow if consumer mood keeps becoming worse since expenditure will probably follow suit.
“I just don’t think that there’s been a very strong correlation between the [consumer] confidence data and actual consumer spending in recent years,” Council of Economic Advisers head Stephen Miran told CNBC on Tuesday. Additionally, if you go down the street, you will see individuals going about their daily lives, including receiving and spending their wages. The economy is continuing to grow.
“There’s a whole bunch of data for the economy that are pretty decent, and pretty darn good,” he said.
Walmart’s share price is up by 0.3 percent in pre-market trading on Wednesday, according to Yahoo Finance, which suggests the business could regain some of the value it lost on Tuesday.
