📉 Wall Street Pauses After Rally as AI Doubts Surface and Walmart Earnings Loom Large

U.S. stock futures edged lower Thursday, signaling a breather after a three-day climb for the S&P 500, as investors turned cautious ahead of earnings from retail heavyweight Walmart, widely viewed as a real-time barometer of American consumer health.

The company’s shares slipped about 0.9% in premarket trading, reflecting nerves over whether resilient spending—the backbone of the U.S. economy—can hold up amid persistent inflation and elevated borrowing costs.

Market participants are watching closely: if Walmart shoppers start tightening their belts, it could ripple across sectors from consumer goods to logistics.

Technology giants that powered Wednesday’s rebound turned softer in early trading, including Apple, Nvidia, and Meta Platforms.

The previous session had seen AI-linked leaders such as Amazon and Nvidia recover ground, helping major indexes close higher. But enthusiasm has recently been tempered by a growing question on Wall Street:

Are massive AI investments translating into real profits—yet?

Earlier this month, sectors from software to transportation wobbled amid fears that rapidly advancing AI tools could disrupt traditional business models faster than companies can adapt. Concerns about lofty valuations—and limited near-term revenue payoff—have injected volatility into what was once a one-way AI trade.

As of early morning trading:

The modest pullback suggests investors are consolidating gains rather than exiting risk entirely, analysts say.

Corporate earnings delivered a mixed picture across industries:

The divergence highlights a market increasingly driven by company-specific execution rather than broad macro optimism.

Minutes from the latest Federal Reserve meeting revealed policymakers were nearly unanimous in holding rates steady last month—but divided on what comes next.

Some officials remain open to further hikes if inflation proves stubborn, while others favor cuts should price pressures ease.

Economists, including analysts at Oxford Economics, believe the split could keep policy in a holding pattern for much of Chair Jerome Powell’s tenure.

Fed officials such as Austan Goolsbee and Michelle Bowman are scheduled to speak later Thursday, potentially offering further clues.

Investors are also awaiting weekly jobless claims data and Friday’s Personal Consumption Expenditures (PCE) report—the Fed’s preferred inflation gauge.

Energy shares moved modestly higher as crude prices climbed amid fears of escalating geopolitical tensions involving the United States and Iran.

Thursday’s cautious tone reflects a market wrestling with two competing narratives:

With Walmart’s results poised to reveal how much spending power Americans really have left, investors may soon learn whether the rally has deeper roots—or was simply running on momentum.