Walmart issues profit warning
U.S. stock futures fell early Tuesday morning, implying stocks would fall at the opening bell after Walmart (WMT) trimmed its profit outlook amid ongoing inflation pressures.
In a statement released after the closing bell on Monday, Walmart said inflation on food has caused it to conduct more markdowns in apparel.
The world’s largest retailer warned it expects its operating income to drop by 13% to 14% in the second quarter and 11% to 13% over the full year. Walmart issued the warning just three weeks before it’s due to announce its second quarter financial results.
At 5:40 a.m. ET, Dow futures fell 140 points, or 0.44% to 31,827. S&P 500 futures edged 12 points, or 0.3% lower to 3,958 while the tech-dominated Nasdaq 100 futures lost 40.25 points, or 0.33% to 12,314.25.
Walmart stock gave away $12.22, or 9.26% to change hands at $119.80 a share.
Fed meeting kicks off
Meanwhile, the Federal Reserve will begin its two-day policy-setting meeting later today.
At the conclusion of the meeting tomorrow, Fed policymakers are widely expected to hike interest rates by another 75 basis points to a target range of 2.25% to 2.50% from 1.50% to 1.75%.
However, some market analysts are not ruling out a 100 basis point hike entirely.
Federal Reserve Chairman Jerome Powell will hold a post-meeting press conference at 2:30 p.m. ET tomorrow.
Powell will have to choose his words very carefully, given how financial markets remain highly sensitive to interest rates and inflation.
Microsoft, Google earnings in focus
On the earnings front, traders will get a chance to analyze financial results from Microsoft (MSFT) and Google-parent Alphabet (GOOG). The two tech titans are scheduled to announce their results after the closing bell today.
Microsoft and Alphabet have a combined market cap of more than $3 trillion, and are heavily weighted in the Nasdaq 100 and the S&P 500. Therefore, their earnings could set the tone for the stock market.
Analysts expect Microsoft to report earnings of $2.30 per share and revenue of $52.47 billion. Alphabet is seen reporting earnings of $1.31 per share on revenue of $70.35 billion.
Other heavy hitters reporting today include McDonald’s (MCD), Coca-Cola (KO), United Parcel Service (UPS), 3M (MMM), General Electric (GE), and General Motors (GM).
