Source: Sharecast
Both the Dow and S&P 500 were falling 0.2% by mid-morning, while the Nasdaq was down 0.4%.
Both the S&P 500 and Nasdaq settled at levels not seen since the last week of February on Wednesday, having gained 4.1% and 6.8% over the past three trading sessions alone as the economic outlook brightened following a temporary trade truce between the US and China, along with a lower-than-expected inflation reading.
However, despite a de-escalation in trade war fears, Walmart chief executive Doug McMillon warned on Thursday that customers could still face higher prices, causing shares in the retailer to fall.
Speaking to CNBC, the big box retail boss said: “We will do our best to keep our prices as low as possible, but given the magnitude of the tariffs – even at the reduced levels announced this week – we aren’t able to absorb all the pressure given the reality of narrow retail margins.”
In other news, Federal Reserve Chair Jerome Powell said that US interest rates are more likely to be higher over the longer term as the global economy faces more frequent and persistent supply shocks.
In a speech on the Fed's first policy framework review since mid-2020, Powell said the economic environment "has changed significantly" since then and the central bank's stance would "reflect our assessment of those changes".
Economic data barrage
In economic data, initial jobless claims held steady in the week ended 9 May, while the four-week moving average edged higher to 230,500 from 227,250.
The Empire State and Philly Fed manufacturing surveys came in ahead of expectations for May, though both indicators were still registering in negative territory.
US producer prices fell by 0.5% in April after no change the previous month, surprising economists who pencilled in a 0.2% increase. The annual rate of PPI inflation eased to 2.4% from 2.7%.
Meanwhile, US retail sales rose by 0.1% in April, slowing from the 1.5% growth seen in March but ahead of the consensus forecast for no change.
Market movers
Foot Locker surged more than 80% early on following an announcement by Dick's Sporting Goods that is will buy the footwear and apparel retailer for $2.4bn.
Network tech giant Cisco surged 7% after the company beat both revenue and profit estimates in its third quarter, reported overnight.