Key Highlights

  • Walmart finished among Dow decliners on Friday, with no company-specific news found, as the market rotated into technology after a weak jobs report, with the Nasdaq-100 finishing the week higher while the Dow and S&P 500 posted weekly losses.
  • Average hourly earnings reached $37.81, the slowest annual wage gain since May 2021, with pay described as not keeping pace with inflation, a mixed signal for a retailer whose customers include budget-conscious shoppers.
  • Coca-Cola matched Walmart's modest decline in the Dow, while Procter & Gamble and McDonald's eked out gains; on the Nasdaq-100, Costco and Ross Stores were also among the decliners.
  • The G7 agreed to release 100 million barrels of crude and diesel from reserves, which could ease freight costs for large retailers; US diesel averaged $6.37 a gallon, just below the record $6.52 set September 22.

Walmart (NASDAQ:WMT) shares edged lower on Friday, October 2, as the market rotated away from defensive, everyday-spending stocks and into technology names powered by the artificial-intelligence boom. No company-specific news was found for Walmart. The world's largest retailer, which sells groceries and household goods through its stores, warehouse clubs and online channels, finished among the decliners on the Dow Jones Industrial Average. The Dow itself rose 250.40 points to close at 51,176.96.

A Classic Rotation

Walmart's small dip was part of a broader pattern. When investors expect interest rates to stay high or rise, they often favour steady, defensive businesses. When those fears ease, money tends to shift into faster-growing companies.

Friday fit that pattern: money went back into growth. A weak September jobs report cut expectations for another Federal Reserve rate hike, and buyers headed for chipmakers and mega-cap tech. The weekly scorecards underline the shift: the Nasdaq-100 finished the week higher, while the Dow and the S&P 500 both posted weekly losses.

Coca-Cola matched Walmart's modest decline in the Dow, while Procter & Gamble and McDonald's eked out gains. On the Nasdaq-100, warehouse-club rival Costco and discount retailer Ross Stores were among the decliners. Consumer staples as a sector still finished slightly higher, but well behind technology.

Walmart's slip was among the smaller moves in the Dow, where 18 of the 30 members finished higher and Nike was the worst performer after disappointing quarterly results and a cautious outlook.

What the Jobs Report Said About Shoppers

The US added just 29,000 jobs in September, against expectations of about 84,000, according to the Bureau of Labor Statistics. Revisions trimmed a combined 60,000 jobs from July and August, and the unemployment rate ticked up.

Wages also cooled. Average hourly earnings reached $37.81, the slowest annual gain since May 2021. Pay is not keeping pace with inflation, as one assessment of the report put it.

For a retailer like Walmart, that cuts both ways. Squeezed households can mean softer spending overall, but price-conscious shoppers often trade down to discount chains.

Fuel Prices and the Fed

Inflation has been driven higher this year by the war with Iran, which pushed up oil and diesel prices. The Federal Reserve raised rates on September 16, its first hike since 2023. After Friday's data, the odds of another increase at the October 27-28 meeting fell sharply before partly recovering.

Relief could come at the pump. The G7 agreed, coordinated through the International Energy Agency, to release 100 million barrels of crude and diesel from emergency reserves over four months. US diesel averaged $6.37 a gallon on Friday, just below the record $6.52 set on September 22. Lower diesel costs would ease freight expenses for big retailers that move goods by truck.

Meanwhile, the Nasdaq-100 set a record close at 30,807.93, and the S&P 500 rose 56.27 points to 7,722.72. Treasury yields, however, reversed to close higher, with the 10-year near its highest level since 2002.

PepsiCo Will Offer an Early Read on Consumer Spending

PepsiCo reports on October 8, giving an early look at how consumer-goods makers are handling cost pressures and demand, followed by Delta on October 9. The big banks report on October 13 and 14 and will offer a read on household credit health. The Federal Reserve's October 27-28 meeting is the key macro event, and any further drop in fuel prices from the G7 release could matter for retailers' shipping costs and shoppers' wallets.