Walmart’s results, S&P 500 upside, Trump Media – what’s moving markets

Investing.com — Wall Street is seen slipping slightly at the open Tuesday ahead of key earnings from retail giant Walmart. Goldman Sachs looks for future equity gains, while Trump Media is seeking to diversify with the purchase of Bakkt. 

1. Walmart expected to shine once more 

The highlight of Tuesday’s corporate earnings slate arrives before the opening bell rings in the form of Walmart (NYSE:WMT), with the retail giant expected to deliver another solid quarter with its low prices for essential products helping in the face of soft demand from budget-conscious consumers.

Walmart is expected to post a roughly 4% rise in revenue and 5% growth in adjusted operating income, according to estimates compiled by LSEG.

The retailer has also started to benefit from investments in its e-commerce and advertising businesses that have helped the company grow its operating income at a faster clip than its revenue.

“We expect another solid all-around delivery and guidance raise driven by strong top-line momentum across the enterprise and ramping alternative revenue streams,” said analysts at Oppenheimer, in a note.

Additionally, “we expect a positive tone from mgmt about holiday (following a good back-to-school season), as well as continued confidence in their positioning in the market and their ability to take share,” said analysts at Citi, in a note.

Walmart’s stock has gained 60% so far this year, ahead of the 23% gains from the benchmark S&P 500 and rival Target (NYSE:TGT)’s near 10% increase. 

2. Futures fall; Walmart in spotlight

US stock futures slipped lower Tuesday, with investors awaiting the release of more corporate earnings from some significant companies.

By 03:40 ET (08:40 GMT), the Dow futures contract was down 65 points, or 0.2%, S&P 500 futures dropped 9 points, or 0.2%, and Nasdaq 100 futures fell by 50 points, or 0.2%.

Nvidia’s earnings will be the highlight of the corporate results this week, with the AI darling likely to set the tone for equity markets at least for the final half of the week, and possibly into year-end, when it reports on Wednesday.

Ahead of this, numbers from Walmart [see above] will be in the spotlight.

About 93% of S&P 500 companies have reported quarterly results so far, with three-quarters exceeding expectations and more than 60% beating revenue estimates, according to data from FactSet.

The US economic data slate only has housing figures on tap Tuesday, while Kansas City Fed President Jeffrey Schmid is set to speak later in the day.

3. Goldman sees 10% S&P 500 upside in 2025

The main US stock indices have slipped back from all-time highs over the last week or so, but analysts at the influential investment bank Goldman Sachs have forecast more strong gains into 2025.

The broad-based S&P 500 has dropped back 1.5% over the course of the last week, closing on Monday at 5,893.62. 

However, Goldman has forecast the S&P 500 index would reach 6,500 by the end of 2025, on the back of continued growth in the US economy and corporate earnings, offering just over 10% upside.

The so-called ‘Magnificent 7’ stocks – Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL), Meta Platforms (NASDAQ:META), Microsoft (NASDAQ:MSFT), Nvidia (NASDAQ:NVDA) and Tesla (NASDAQ:TSLA) – collectively will outperform the rest of the companies in the benchmark index next year, Goldman said, but only by around 7 percentage points, the slimmest margin in seven years.

“Although the ‘micro’ earnings story supports continued outperformance of the Magnificent 7 stocks, the balance of risk from more “macro” factors such as growth and trade policy lean in favor of the S&P 493 (companies),” the bank said, in a note dated Nov. 18.

Goldman estimated corporate earnings to grow 11% and a real U.S. gross domestic product growth of 2.5% in 2025.

The brokerage also warned that risks remain high for the broader U.S. equity market heading into 2025, due to a potential threat from tariffs and higher bond yields.

“At the other end of the distribution, a friendlier mix of fiscal policy or a more dovish Fed present upside risks,” Goldman added.

4. Trump Media looks to diversify with Bakkt purchase

Trump Media & Technology Group (NASDAQ:DJT) stock slipped back a touch in premarket trading Tuesday, after posting gains of over 16% the previous session following a report that Donald Trump’s social media company is in advanced discussions to buy digital asset marketplace Bakkt (NYSE:BKKT) in an all-stock deal.

The Financial Times reported that Trump Media & Technology Group is keen on Bakkt, as it looks to diversify its offerings beyond social media, having recently launched crypto venture, World Liberty Financial.

President-elect Trump had positioned himself as pro-cryptocurrency on the campaign trail, promising to make America the “world capital for crypto and Bitcoin.”

Bakkt — which was created by Intercontinental Exchange (NYSE:ICE), the owner of the New York Stock Exchange — skyrocketed more than 162% on Monday, amid repeated trading halts due to volatility.

5. Future crude supply in spotlight

Crude prices slipped slightly Tuesday, handing back some of the previous session’s sharp gains as traders digested the potential for significant supply outages.

By 03:40 ET, the U.S. crude futures (WTI) slipped 0.6% to $68.78 a barrel, while the Brent contract fell 0.5% to $72.92 a barrel.

Oil prices surged over 3% on Monday after Equinor said it had halted production at its Johan Sverdrup oilfield in Norway, the biggest oilfield in Western Europe.

The outage presents some uncertainty over oil supplies in the region, and added to the concerns created by the Biden administration’s decision to allow Ukraine to use US-made weapons to strike deep into Russia.

There has been little impact on Russian oil exports from the war so far, but if Ukraine were to target more oil infrastructure that could see oil markets add more of a geopolitical bid.

That said, the International Energy Agency’s recent monthly publication forecast that global oil supply will easily exceed demand in 2025, with the agency citing increased production outside the Organization of Petroleum Exporting Countries and allies. 

Production in the U.S. remained close to record highs above 13 million barrels per day, and the proposed appointment of Chris Wright, the CEO of Liberty Energy, as the next Secretary of Energy by President-elect Donald Trump has been seen as a strong signal of a focus on ramping up domestic fossil fuel production.