U.S. stock markets continued their downward trajectory on August 21, 2025, extending a modest but persistent losing streak into a fifth consecutive session. The S&P 500 fell 0.4 percent to close at 6,370.17, while the Dow Jones Industrial Average dropped 152.81 points, or 0.3 percent, settling at 44,785.50. The Nasdaq Composite, which has been particularly sensitive to technology and growth stocks, slid 0.7 percent to end the day at 21,100.31. This streak of losses reflects growing investor unease, sparked by a combination of disappointing corporate earnings, rising geopolitical tensions, and mounting uncertainty surrounding the Federal Reserve’s next policy moves.
Much of Thursday’s trading narrative was shaped by Walmart, whose quarterly earnings landed with a thud despite revenue that surpassed analyst forecasts. The retail giant posted sales of $177.4 billion for the quarter, slightly exceeding expectations. However, its adjusted earnings came in at just 68 cents per share, missing the projected 73 cents. The miss sent shares sharply lower and cast a shadow over the broader retail sector. Compounding the market’s concern, Walmart reported a 43 percent drop in net income to $4.5 billion, attributing part of the decline to higher input costs driven by new tariffs. Despite raising its full-year sales forecast, investors appeared more focused on the compressed profit margins and the implications for consumer-facing businesses navigating a difficult economic environment.
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Walmart’s earnings miss was especially impactful given its status as a bellwether for consumer demand and supply chain resilience. The company’s weaker-than-expected profit figures sparked broader concerns about whether large-cap retailers can maintain margins in a climate of rising operational costs. Investors are watching closely to see whether these pressures are unique to Walmart or a broader indicator of strain across the sector.
The disappointing earnings report landed at a time when traders were already exhibiting caution ahead of Federal Reserve Chair Jerome Powell’s much-anticipated speech at the Jackson Hole Economic Symposium. Scheduled for later in the week, Powell’s remarks are expected to provide critical insight into the central bank’s outlook on interest rates. In recent weeks, economic indicators have painted a mixed picture, with signs of slowing business activity but also persistent inflationary pressures. Treasury yields have crept higher, and market sentiment has turned increasingly cautious as hopes for immediate rate cuts have begun to fade.
Investors are also grappling with fresh geopolitical concerns, particularly surrounding trade tensions between the United States and the European Union. Ongoing disagreements over tariffs and regulatory alignment are introducing additional uncertainty into an already fragile global trade environment. These factors are making equity markets more volatile, with even strong earnings reports from select sectors failing to lift broader sentiment.
Adding to the market’s unease is a more cautious tone from major institutional investors and analysts. Many are beginning to question whether the recent market highs are sustainable without clear signs of monetary easing or stronger economic momentum. The Fed’s data-dependent approach means that any further deterioration in macroeconomic indicators could delay anticipated policy support, creating a challenging environment for equities in the near term.
This pullback in the markets also reflects a growing divergence in investor expectations. On one hand, some companies continue to post robust earnings and signal resilience in consumer demand. On the other, rising interest rates, higher costs, and uncertainty around trade policy are weighing heavily on valuation multiples. The result is a choppy, uneven market where short-term sentiment can swing quickly in response to corporate news and economic data.
As the trading week heads toward its close, all eyes will be on the Jackson Hole Symposium, which has historically served as a platform for the Federal Reserve to signal shifts in policy direction. Should Powell offer a more hawkish stance or fail to address market concerns around slowing growth, equity markets may see further downside pressure.
For now, the five-day losing streak reflects a broader recalibration. After a period of strong gains earlier in the year, investors appear to be taking a more defensive posture, rotating out of high-risk positions and waiting for more clarity on both corporate performance and central bank strategy. Until then, volatility is likely to remain elevated, and markets may continue to drift as they search for a firmer foundation.
