Stocks have taken a beating, and investors have been knocked to the mat.

But just as markets dust themselves up from the tech selloff, investors are wrestling with another challenge -- the prospect of the Federal Reserve cutting rates less than they expected.

The stock market could soon be on the ropes again after a subtle warning from Walmart. The retailer is coping well for now in this new era of higher tariffs, but CEO Doug McMillon said the company's tariff costs are increasing each week. He expects that to continue into the third and fourth quarters of the year.

While Walmart's strategy is to keep prices as low as it can for as long as it can, other smaller retailers won't have the scale or size to absorb those costs as much. Further price hikes may be inevitable.

On the day Fed Chair Jerome Powell delivers his keynote Jackson Hole speech, that ought to be a concern for the Fed and Wall Street.

The issue is firmly on the central bank's radar -- the minutes from its July meeting, released Wednesday, revealed that officials disagreed on the inflationary impact of tariffs. Cleveland Fed president Beth Hammack said Thursday she would not see a case for cutting rates in September, citing inflation "trending in the wrong direction."

If that's a more widely held view, President Donald Trump's reaction will be worth watching. Trump, who has repeatedly called for lower borrowing costs, will be sharing the markets' concerns.

The odds of rate cut in September have tumbled in recent days, falling to 71% early Friday, according to CME's FedWatch tool, down from 91% just 10 days ago.

For all the grappling over the path of interest rates, inflation may end up having the Fed and the stock market in a chokehold.

-- Callum Keown

***

How Walmart is Navigating Higher Tariffs, Economic Uncertainty

Walmart's $177.4 billion in quarterly sales beat expectations, but analysts seemed most impressed by the retailer's ability to thrive despite trade tariffs and economic uncertainty. CEO Doug McMillon said that the impact from tariffs has been gradual enough that consumer behavior adjustments have been "somewhat muted."

   -- But costs are increasing by the week as Walmart replenishes its inventory 
      as tariffs on imported products shift higher, McMillon said. Lower- and 
      middle-income households are starting to rein in their spending, becoming 
      less tolerant of higher prices on discretionary items than wealthier 
      consumers. 
 
   -- Because of tariffs, Walmart is raising prices on about 10% of the goods 
      it imports, absorbing the rest, CFO John David Rainey told The Wall 
      Street Journal. Walmart is placing orders early on items it thinks will 
      sell well, and ordering less of some higher-priced items subject to 
      higher tariffs, he said. 
 
   -- Walmart's sheer scale gives it ample leverage to negotiate rollbacks of 
      vendor prices, ensuring that it won't absorb the full financial impact. 
      Jeffries analyst Corey Tarlowe said its focus on value and market share 
      suggests the potential for "continued earnings durability & future 
      upside" despite tariffs. 
 
   -- The company's strong sales growth -- up 4.8% from a year ago -- reflects 
      market share gains across key categories, it said, as customers respond 
      to pricing rollbacks and e-commerce offerings. Sales momentum allowed the 
      company to slightly raise its guidance for the fiscal year. 

What's Next: Walmart now sees fiscal-year net sales rising 3.75% to 4.75% from last year, up from prior guidance of 3% to 4%. Walmart also tweaked its adjusted earnings forecast to $2.52 to $2.62 a share, from previous guidance of $2.50 to $2.60.

-- Sabrina Escobar and Janet H. Cho

***

European Auto Makers Still Face Higher U.S. Tariffs, For Now

Weeks after a handshake deal on trade, the U.S. and European Union put details in writing, with no immediate relief for European auto makers. The U.S. will keep its 27.5% tariffs on imported EU vehicles until the EU lowers levies on a variety of U.S. goods.

   -- Nearly all other goods imported to the U.S. from the EU will face 15% 
      tariffs. Aircraft and aircraft parts, generic pharmaceuticals, and 
      natural resources like cork that aren't available in the U.S. are 
      excluded and have no tariffs. The auto tariffs will lower to 15% once the 
      EU moves to cut its tariffs. 
 
   -- Specifically, the joint statement said the U.S. was seeking lower tariffs 
      for American seafood and agricultural goods, including tree nuts, dairy 
      products, and fresh and processed fruits and vegetables. EU trade chief 
      Maros Sefcovic said the bloc will introduce legislation to address that 
      this month. 
 
   -- Sefcovic said Thursday that the framework was just the start of a process 
      that can eventually cover more sectors, improve market access, and 
      strengthen economic ties between the two sides. The 15% rate imposed by 
      the Trump administration is half the level threatened in July before the 
      handshake deal. 
 
   -- White House trade advisor Peter Navarro, speaking to reporters on 
      Thursday, said the EU deal was a top priority for the administration, 
      given the EU's economic and strategic importance. "We're ushering a 
      completely new and beautiful spirit and environment of cooperation with 
      Europe," he said. 

What's Next: Navarro also spoke about India, which the Trump administration has targeted with 50% tariffs on their imports to the U.S. starting next week because India imports oil from Russia. Navarro said he didn't expect the Aug. 27 deadline to be extended.

-- George Glover and Janet H. Cho

***

ESPN's Sports Streaming Platform Spells Trouble for Traditional TV

Walt Disney's new ESPN streaming app may be giving sports fans something to cheer for, but it potentially spells trouble for traditional cable providers and could hasten households' shift away from traditional television. Live sports broadcasting was the glue holding cable bundles together.

   -- The ESPN direct-to-consumer platform costs either $11.99 or $29.99 a 
      month depending on which of two plans are selected. There's also an 
      option for users to bundle Disney+, Hulu, and ESPN unlimited for $29.99 a 
      month for the first year. Traditional cable customers will have access to 
      the streaming app. 
 
   -- But fewer people may want to pay for cable if they can get access to all 
      their favorite content through different streaming providers. Fox also 
      launched its newest streaming operation, FOX One, including Fox's news, 
      sports, and entertainment content for $19.99 a month. 
 
   -- Media research firm Nielsen reported that streaming usage overtook the 
      combined share of broadcast and cable for the first time ever in May. 
      Live sports events dominated the most-watched telecasts in 2024, taking 
      75 of the top 100 spots, according to Nielsen data. 
 
   -- As such, companies have boosted live sporting events on their streaming 
      platforms. Amazon.com is the only place NFL fans can catch Thursday Night 
      Football each week, and viewers will need access to a Netflix account if 
      they want to catch all of the NFL's Christmas games this year. 

What's Next: Comcast's NBCUniversal is talking with Major League Baseball about a three year deal to carry games on NBC and the Peacock streaming platform, The Wall Street Journal reported. And Netflix is nearing a deal to stream the "Home Run Derby," the report said.

-- Angela Palumbo and Liz Moyer

***

NYSE Texas Gets a Head Start on Y'All Street

Things officially kicked off this week for NYSE Texas, the entity representing the New York Stock Exchange's electronic equities operation, which relocated to Dallas from Chicago. Dozens of companies and exchange-traded fund issuers have announced dual listings on the exchange.

   -- It's racing the Texas Stock Exchange, or TXSE, which is backed by 
      investors like BlackRock and Citadel Securities. While TXSE awaits 
      approval from the Securities and Exchange Commission, the commitments 
      from big-name issuers have given NYSE Texas a head start on the financial 
      world's new "Y'all Street." 
 
   -- Dallas-based AT&T joined NYSE Texas at the beginning of August and 
      Houston's NRG Energy announced its listing on Monday. Meanwhile, 
      Florida-based Trump Media & Technology Group, whose largest shareholder 
      is President Donald Trump's family, was the first company to join NYSE 
      Texas. A total of 62 new listings have joined. 
 
   -- Trading volume remains low but not insignificant. NYSE Texas has handled 
      a daily average of $9.3 billion in trades over the past five sessions, or 
      around 2.2% of all trading on U.S. exchanges, according to data from Cboe 
      Global Markets. 
 
   -- Dallas-based TXSE Group, with $120 million from its backers, aims to 
      start trading by 2026 if approved as a new electronic exchange. TXSE has 
      pitched itself as the more comprehensive -- and more Texan -- exchange 
      compared with its New York-based competitor, with primary and 
      dual-listings. 

What's Next: While the dueling exchanges compete for listings and trading volume over the coming years, the real winner here may be Texas itself. Nasdaq, too, announced in March that it would open a regional headquarters in Dallas.

-- Nate Wolf

***

Cracker Barrel's New Logo Is Hard to Swallow for Markets

Restaurant chain Cracker Barrel, known for its cozy décor and Southern-style breakfasts, is facing a backlash against the minimalist redesign of its logo.

   -- The company says the new logo "is now rooted even more closely to the 
      iconic barrel shape," but there is no longer an actual barrel in the logo, 
      as there was for decades. 
 
   -- Some conservatives have accused Cracker Barrel of making the new logo 
      part of a "DEI regime," referring to diversity, equity, and inclusion 
      efforts. President Donald Trump's son Donald Trump Jr. joined in the 
      criticism Wednesday adding to the groundswell of criticism on social 
      media. 
 
   -- The company's stock fell nearly 15% Thursday in intraday trading before 
      closing down 7% at $54.80. Shares are still up 34% over the past 52 weeks, 
      however, and its last earnings report was solid, coming in nearly three 
      times what analysts expected at 58 cents a share on revenue of $821 
      million. 
 
   -- While it began remodeling its 600 stores last year with brighter lighting 
      and a "modern farmhouse" vibe, the logo change this week appears to have 
      been a surprise. The controversy has echoes of the backlash against Bud 
      Light two years ago, when the beer brand faced a boycott after running a 
      social media promotion by a transgender influencer. 

What's Next: The question for the restaurant chain is whether the logo redesign will actually affect sales. "Our goal is to take what people love about Cracker Barrel and open the aperture a little bit so that more people love Cracker Barrel," company CEO Julie Felss Masino said last summer, when it began its nationwide redesign.

-- Anita Hamilton and Brian Swint

***

-- Newsletter edited by Liz Moyer, Patrick O'Donnell, Rupert Steiner

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

August 22, 2025 06:52 ET (10:52 GMT)

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