Why Walmart Stock Was Sliding Today

Shares of Walmart (NYSE: WMT) were pulling back today along with a broader slide in the retail sector, after the Conference Board's Consumer Confidence Index fell to a four-year-low, with future expectations hitting a 12-year low, according to the Conference Board.

As the country's and the world's biggest retailer, Walmart has arguably more exposure to consumer spending than any other company, though its reputation for low prices may make it better positioned than some other retailers to weather a recession.

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As of 2:07 p.m. ET, Walmart stock was down 2.9% on the news. At the same time, the SPDR S&P Retail ETF was down 1.1%, and Target was down 3.4%.

Image source: Walmart.

Walmart faces economic pressures

Walmart has never been shy about voicing its opinion on political issues like tariffs and other policies it thinks are costly for American consumers, and therefore itself, and the company finds itself that situation again with rapidly weakening consumer sentiment and reciprocal tariffs set to go into effect on April 2.

The Conference Board's Consumer Confidence Index fell by 7.2 points in March to 92.9, while the expectations index fell 9.6 points to 65.2. The Present Situation Index was relatively strong at 134.5.

The decline in confidence was especially strong among consumers over 55 years old and those earning less than $125,000 a year. Those findings could also be a warning for Walmart, which tends to have an older and lower-income customer base than comparable retailers.

What it means for Walmart

One consumer confidence reading isn't a reason to panic for Walmart investors, but the stock has already started to pull back on macroeconomic weakness and cautious guidance for 2025 after an impressive surge over the previous two years and strong growth in a challenging, inflationary environment.

The retailer can certainly weather a recession over the long term, but its valuation is still higher than it's been historically, setting up for a further decline if the economy slows. Management said on the recent earnings call that it's confident in its ability to weather macro uncertainty, but investors should expect the stock to continue to react to this kind of macroeconomic news.

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Jeremy Bowman has positions in Target. The Motley Fool has positions in and recommends Target and Walmart. The Motley Fool has a disclosure policy.