Walmart gives big clue on chance of US recession - days after grim warning from Home Depot

The S&P 500 closed 1.6 percent higher, regaining all of the index's losses this month.

The tech-heavy Nasdaq leapt 2 percent after signs the US economy will avoid recession.

Walmart's second quarter saw strong profit and sales, CEO Doug McMillon told analysts on Thursday's earnings call.

The chain was ‘not seeing a weaker consumer overall,’ McMillon said.

Walmart shares rose more than 6 percent in early trading on the news.

The stock is up more than 30 percent year to date.

The S&P 500 climbed more than 1.5 percent by Thursday afternoon after retail sales beat expectations.

The Nasdaq leapt around 2.3 percent as economic data, including reduced jobless figures and an improved outlook from Walmart, dispelled fears of the US tipping into recession.

Analysts are now hopeful the Fed will begin to cut interest rates in September.

Home Depot yesterday warned that consumers were feeling the squeeze of higher interest rates and had pulled back on home improvement spending as a result.

The hardware giant’s sales slumped 3.6 percent in the last quarter, raising concerns the US economy was heading for recession.

However, today’s Walmart and jobless figures suggest otherwise, with analysts pointing to a much rosier picture with possible rate cuts on the horizon.

'We’re back to an environment where good news is good news and bad news is bad news,' Bret Kenwell from eToro said of the latest data.

'Investors and consumers want inflation to go lower, but not at the expense of the economy. Today’s stronger-than-expected retail sales figure quiets some of the recent fears that the US may be slipping into a recession.'

'After a weak payrolls report, there were worries that the Fed waited too long to cut rates,' he added.

'While it would still be appropriate for the Fed to lower rates next month, today’s reports should buy them some time until the September meeting.'

It's been a rocky few weeks for markets but today’s economic data appears to have added some cheer.

The S&P 500 rose 1.1 percent and the Nasdaq rose 1.8 percent in early trading on the back of positive sales and falling jobless data.

Jobless claims have fallen to their lowest level since early July.

US retail sales rose 1 percent in July, the most since January 2023.

The data suggests fears of a weaker consumer have been overblown, a positive marker for the overall economy.

The value of retail purchases increased 1 percent, and sales minus autos and gasoline were up 0.4 percent, according to the Commerce Department.

Car sales, electronics and appliances made strong gains.