Walmart guidance, oil spike drag Wall Street lower; traders cautious before key U.S. inflation data

Wall Street dipped as Walmart's weaker outlook, U.S.-Iran-driven oil gains and airline/housing weakness weighed on sentiment, while computer hardware and oil services outperformed and 10-year yields held near 4.07% ahead of CPI.

The Dow slid 267.50 points (0.5%) to 49,395.16, the Nasdaq fell 70.91 points (0.3%) to 22,682.73 and the S&P 500 dipped 19.42 points (0.3%) to 6,861.89.

Wall Street's weakness partly stemmed from Walmart's (WMT) 1.4% slump after its Q4 earnings beat estimates but offered weaker-than-expected guidance for the year ahead. Rising crude oil prices amid U.S.-Iran conflict fears added to negativity, though traders held back before Friday's key consumer price inflation data, which could sway rate cut expectations. Fed minutes noted many participants want firm disinflation progress before further cuts.

Rising crude oil prices amid U.S.-Iran conflict fears added to negativity, though traders held back before Friday's key consumer price inflation data, which could sway rate cut expectations. Fed minutes noted many participants want firm disinflation progress before further cuts.

Airline stocks substantially moved downwards, with the NYSE Arca Airline Index plummeting by 4.4%. Housing stocks are significantly weak, as reflected by the 1.3% loss posted by the Philadelphia Housing Sector Index. Computer hardware stocks saw considerable strength, resulting in a 3.3% surge by the NYSE Arca Computer Hardware Index. Oil service stocks also turned in a strong performance amid an extended surge by the price of crude oil amid concerns about a potential military conflict between the U.S. and Iran.

Asia Pacific stocks moved mostly higher, with several markets still closed for holidays. Japan's Nikkei 225 Index climbed by 0.6%, while South Korea's Kospi surged by 3.1%. The major European markets moved to the downside on the day while the German DAX Index slid by 0.9%, the U.K.'s FTSE 100 Index declined by 0.6% and the French CAC 40 Index fell by 0.4%.

In the bond market, treasuries recovered from initial weakness and showed a lack of direction before closing roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 4.07%.

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