US Stocks Experience Heavy Selling as Retail Earnings Underwhelm

Market Overview

On August 21, 2025, US stock markets exhibited a mixed performance, continuing a challenging period for technology stocks as investors reacted to the latest retail earnings and awaited insights from the Federal Reserve's minutes.

The Dow Jones Industrial Average ( ^DJI ) managed to close slightly higher, up about 0.1%. In contrast, the S&P 500 ( ^GSPC ) fell by 0.2%, while the tech-heavy Nasdaq Composite ( ^IXIC ) took the lead in losses, declining approximately 0.7%. Earlier in the session, the Nasdaq was down nearly 2% before managing to recover.

Tech Stocks Under Pressure

The ongoing sell-off in tech stocks has raised concerns among investors, particularly regarding the sustainability of the AI boom. Palantir Technologies ( PLTR ), which experienced a staggering nearly 10% drop the prior day, saw another decline of 1% during afternoon trading. In total, Palantir's stock has dropped significantly, creating a buying opportunity for some retail investors.

Meanwhile, shares of other major tech names also faced selling pressure. Nvidia ( NVDA ) was down about 0.3%, and Alphabet ( GOOGL, GOOG ) experienced a decline of over 1%. Shares of Amazon ( AMZN ) and Apple ( AAPL ) also fell more than 1%, indicating a broader trend affecting the sector's performance.

Disappointing Retail Earnings

Wednesday saw Walmart ( WMT )'s earnings release disappoint investors, causing its stock to tumble by more than 4%. Despite a rise in sales driven by lower prices attracting customers, Walmart's quarterly profits fell short of expectations, intensifying scrutiny on the retail sector.

Target ( TGT ) was another focus, with its stock plunging more than 10% after it fell short of earnings expectations. The company reported challenges related to tariffs and consumer spending, raising concerns for the newly appointed CEO, Michael Fiddelke.

Federal Reserve's Influence

Attention is shifting towards the Jackson Hole Economic Symposium, where Federal Reserve Chair Jerome Powell is scheduled to make remarks on August 22. The minutes from the Fed's previous meeting indicated a cautious stance among policymakers, primarily concerned about persistent inflation rather than a weakening labor market.

As preparations for Powell’s speech continue, market sentiments remain uncertain, especially with jobless claims rising to 235,000, exceeding economists' expectations. This increase in claims is a sign that the labor market may be exhibiting some weakness amidst broader economic challenges.

Conclusion

The current landscape of US stocks reflects a complex web of challenges across tech and retail sectors, combined with ongoing concerns over inflation and the potential for rate cuts from the Federal Reserve. Market participants appear to be adopting a cautious approach as they await more economic data and guidance from Fed leadership.