U.S. business activity picked up pace in August, led by a resurgent manufacturing sector that saw the strongest growth in orders in 18 months, a purchasing managers survey showed on Thursday.
Sales of previously owned U.S. homes ticked unexpectedly higher in July, but the pace of sales remains sluggish amid affordability issues for buyers, thanks to high house prices and interest rates on mortgages.
Hiring plans by U.S. companies have shrunk for a second year, with 20% of employers surveyed by the Conference Board saying they will bring on fewer employees in the second half of the year. That proportion is also double the amount of firms planning to cut back last year. The research group, which counts more than 1,000 private and public companies as members, said that economic uncertainty amid new U.S. tariffs, deportations, and the advent of artificial intelligence has given employers pause.
Walmart still managed to sprint past nearly everyone else despite profits falling this quarter and a rare miss on earnings-per-share, snapping a 12-quarter winning streak. But revenue rose, guidance climbed, and the retail giant once again reminded Wall Street that it’s better at surviving storms than celebrating streaks.
Adjusted earnings came in at 68 cents, short of the 73 cents analysts expected, sending the stock down about 3% in premarket trading. But revenue jumped nearly 5% to $177.4 billion, U.S. comparable sales rose 4.6%, and Walmart raised its full-year forecast for both sales and profit. The picture was less a stumble than a reminder of what makes the company hard to knock over: When profit is pressured by tariffs, labor costs, or insurance claims, Walmart has multiple levers to pull — and it’s not shy about using them.
CEO Doug McMillon acknowledged that tariffs are steadily increasing costs and that the cumulative effect of higher costs is beginning to affect shopping patterns. He said, “As we replenish inventory at post-tariff price levels, we’ve continued to see our costs increase each week, which we expect will continue into the third and fourth quarters.” But he added that, with the way things have played out so far, “the impact of tariffs has been gradual enough that any behavioral adjustments by the customer have been somewhat muted.”
But if tariffs were the headwind, Walmart’s answer was the same tailwind it has relied on for decades: everyday low prices.
“With regard to our U.S. pricing decisions, given tariff-related cost pressures, we’re doing what we said we would do,” McMillon told investors. “We’re keeping our prices as low as we can for as long as we can.” This quarter, his answer — and the company’s — was to lean into the brand’s oldest promise: low prices. In practice, that meant 7,400 “Rollback” discounts during the quarter, a not-so-subtle reminder to shoppers that Walmart intends to be the last place inflation shows up.
McMillon said that shoppers’ spending has “been generally consistent” and that “the impact of tariffs has been gradual enough that any behavioral adjustments… have been somewhat muted.” Still, shoppers overall have been spending somewhat cautiously, leaning toward needs over wants, but tariff-related price increases have caused middle- and low-income shoppers to rein in their spending even more. The pattern is clear: smaller baskets, sharper focus on value, and a consumer leaning harder into Walmart’s core strengths.
R.J. Hottovy, the head of analytical research at Placer.ai, said Walmart is one of “retail’s winners” during the quarter. He added, “Placer.ai data shows consumers are extremely price-sensitive in 2025, with many retailers who raised prices seeing a negative impact on foot traffic. Walmart’s scale and leverage with suppliers, however, should allow it to manage tariff-related price increases better than its competitors.”
Most retailers would see that as a warning flare. Walmart is treating it as a competitive weapon. Its scale allows it to swallow some of the added costs and still plaster those “Rollback” tags across aisles, daring rivals to keep up. Groceries, memberships, and ads buffer margins, letting Walmart absorb blows others can’t. Ahead of the earnings report, Jefferies’ Corey Tarlowe described those share gains as “durable momentum,” pointing out that tariffs may nick profits but also accelerate the company’s ability to pull traffic away from mid-tier competitors.
But those rollbacks weren’t a magic trick. Groceries and health products carried the quarter, providing steady traffic while more discretionary categories lagged. Membership income climbed more than 5%, helping pad recurring revenue. E-commerce surged 26% in the U.S. and 25% globally, with store-fulfilled delivery now accounting for nearly half of the company’s growth. Advertising revenue — the kind of high-margin side hustle that most retailers dream about — jumped 46% worldwide.
Chief financial officer John Rainey described the quarter as one of quiet share gains with growth across all income cohorts in the quarter. He stressed that inventory levels remain healthy enough to keep the company nimble in a shifting economy.
Analysts largely sided with management’s framing. JPMorgan said the report doesn’t fundamentally change its positive outlook on the stock. Wall Street wants to know how long Walmart can keep absorbing costs before it feels the pinch, yet the stock largely remains rated a “Buy.” With analysts calling out its pricing power, Walmart has turned tariffs into both a moat and a marketing message; higher costs may be a storm, but it's one the company seems built to weather better than anyone else. The quarter may have ended Walmart’s EPS streak, but it didn’t change the story.
The contrast with rivals only sharpens that point. Target, once seen as Walmart’s trendier twin, has been struggling with slower foot traffic and tariff exposure in apparel and home goods. Home Depot and Lowe’s are contending with stalled home-improvement spending. Even Costco, whose membership model is its shield, has seen sales growth flatten as households stretch their budgets.
What ties the sector together is a pivot to more resilient revenue streams: loyalty programs, advertising, and delivery services. But where others are experimenting, Walmart is scaling. With more than 90% of U.S. households shopping at its stores each year, the company has a platform that can turn side bets into profit engines. Its ad business now looks less like a pilot project and more like a media arm. Its e-commerce growth suggests it’s no longer just chasing Amazon but carving out a different model, with stores doubling as fulfillment hubs and groceries anchoring digital loyalty.
That’s why the market’s fixation on the earnings miss may seem out of step with the substance of the quarter. Profits slipped. But sales rose, forecasts climbed, customers kept coming, and Walmart kept widening the gap with peers. For most retailers, a 3% dip in premarket trading would sting. For Walmart, it was almost comic relief — a reminder that even when it trips, it keeps outpacing the field.
An appeals court on Thursday threw out a more than $500 million judgment against President Trump and his business empire in a sharply splintered ruling that paves the way for further proceedings before New York’s highest court.
The decision from a five-judge panel provides a significant legal boost for Trump in the case, which was brought by New York Attorney General Letitia James.
“The court’s disgorgement order, which directs that defendants pay nearly half a billion dollars to the State of New York, is an excessive fine that violates the Eighth Amendment of the United States Constitution,” Justice Peter Moulton wrote in one of three opinions, none of which commanded a majority.
Lawyers for Trump and the New York attorney general’s office didn’t immediately return a request for comment.
James, a Democrat, sued Trump in September 2022. She said her office had uncovered “incredible fraud and illegality,” alleging that Trump, his two eldest sons, and former Trump Organization executives had lied to lenders to get cheaper real-estate financing.
Her lawsuit claimed that Trump’s financial statements systematically overestimated the value of his marquee Manhattan skyscrapers, golf courses, and other properties in financial statements to lenders.
After the judge, Justice Arthur Engoron, ruled in favor of the attorney general, the state’s civil suit emerged as a defining case for James and a serious threat to Trump’s wealth and control of his real-estate empire.
Engoron, who clashed with Trump and his legal team during the case, also restricted the Trump Organization from borrowing money and effectively prohibited Trump’s two eldest sons from running the business for two years. The appeals court had previously put those penalties on hold while Trump challenged the ruling. Trump last year secured a $175-million bond, which relieved him of having to pay the full amount while he appealed the judgment.
James began her investigation in 2019, after Trump’s personal attorney Michael Cohen testified before Congress that the president had inflated his assets to obtain financial benefits. She accused Trump of inflating his annual net worth by as much as $3.6 billion.
The attorney general also accused Trump of hiding low appraisals and land-use restrictions, relying on dubious investment metrics and even tripling the square footage of his Trump Tower triplex penthouse in Manhattan.
Trump’s lawyers portrayed the case as an abuse of a broad state civil-fraud statute. Never before had the state sought such punishment for property valuations they claimed were a matter of opinion, they argued.
Trump’s lawyers argued that he paid back the loans and never defaulted. His lenders, the lawyers said, made tens of millions of dollars from the deals. They also pointed to trial testimony that suggested Trump would have qualified for the same interest rates even if his net worth was as low as alleged.
James and Trump have battled in and out of courtrooms for years, and their feud has escalated since Trump’s return to the White House. The Justice Department is investigating whether James’s office violated Trump’s rights by bringing a civil lawsuit against him and his business. It is separately conducting a probe into whether James committed mortgage fraud by making allegedly false representations related to properties in Brooklyn and Virginia. A lawyer for James has called these probes political retribution.
With younger consumers prioritizing healthy beverages, Starbucks will expand its test of cold-foam drinks featuring coconut water to hundreds more stores. According to CNBC, Starbucks will roll out the drinks in more than 400 stores across major cities, including New York, Los Angeles and Chicago, starting Thursday. The plan, already tested in New York, is to layer matcha foam or cold brew foam over coconut water. Starbucks hopes the healthier choices can reboot sales after a string of weak earnings.
The U.S. and European Union on Thursday revealed fresh details about their trade framework, including on hotly contested and anticipated pharma and semiconductor tariffs.
After weeks of heated negotiation, Brussels and Washington finally arrived at a trade agreement late last month, setting out 15% blanket tariffs on EU exports to the U.S. Under the deal, the EU also committed to purchase $750 billion worth of U.S. energy and invest at least an additional $600 billion in the U.S.
Many political and business leaders in Europe at the time expressed concerns about the deal being unbalanced. Several questions remained unanswered, including what tariff rate would apply to some goods U.S. President Donald Trump has hit with sectoral duties.
Thursday’s announcement at last shed more details at a time when many other trading partners are still waiting, and negotiating, for similar clarity on their respective trade deals with the U.S.
Speaking to journalists on Thursday after the announcement, EU Trade Commissioner Maros Sefcovic said that “this is the most favorable trade deal the U.S. has extended to any partner.”
“But this is not the end. This is the beginning. This framework is the first step, one that can grow over time to cover more sectors, improve market access, and strengthen our economic ties even further,” he added.
Key points in the statement include the U.S. committing to “apply the higher of either the U.S. Most Favored Nation (MFN) tariff rate or a tariff rate of 15 percent, comprised of the MFN tariff and a reciprocal tariff, on originating goods of the European Union.”
As of Sept. 1, the U.S. will apply only MFN duties on several goods from the EU, including “unavailable natural resources (including cork), all aircraft and aircraft parts, generic pharmaceuticals and their ingredients and chemical precursors.”
Several so-called Section 232 tariffs have been capped at the wider 15% tariff rate, including those on lumber, semiconductors, and pharmaceuticals, according to a senior U.S. administration official. This is sharply below the rates Trump has sometimes threatened, as well as a 100% levy on semiconductors.
Meanwhile, the statement noted that the EU intends to “eliminate tariffs on all U.S. industrial goods and to provide preferential market access for a wide range of U.S. seafood and agricultural goods.” This was already broadly covered in the initial framework.
The statement also included insights into the EU’s energy purchasing and investment pledges, which previously raised questions about their feasibility and about potential repercussions if the commitments do not materialize.
The latest announcement reiterated figures for planned spending from the EU, including on artificial intelligence chips, energy and broader investments in the U.S., but described them as intended and expected, rather than as guaranteed commitments, a senior administration official pointed out.
Thursday’s statement also noted plans for the EU to “substantially” increase its procurement of U.S. military and defense equipment, even as Europe has committed to growing its own defense capabilities.
Notably, the latest agreement does not introduce changes in terms of the EU’s Digital Services Act, which includes regulations for big tech companies and has long been a point of contention in trade talks for Trump.
Sefcovic on Thursday noted that the digital sector had been kept out of trade talks.
He also addressed questions regarding the wine and spirits sector, which is not covered by the deal. The EU’s trade commissioner suggested that, while it would not be easy to come to an agreement on this issue with Washington, “these doors are not closed forever.”
Pharma
Europe’s pharmaceutical sector — the U.S.′ top source for pharma imports — will also see tariffs capped at up to 15%. Critically, the rate will not stack on top of other EU-wide tariffs.
From Sept. 1, the Trump administration has also agreed to only apply its MFN drug pricing policy to generic pharmaceuticals. The directive aims to reduce U.S. drug prices by tying them to the typically lower prices paid by other developed nations.
Back in April, the Trump administration had launched a so-called Section 232 investigation on pharmaceutical products to examine the impact of imports on national security. In recent weeks, Trump threatened levies as high as 250% on the pharma sector and sent an ultimatum to major firms demanding that they lower U.S. drug prices.
The White House leader has long lambasted the sector over what he has dubbed “abusive” pricing practices, while simultaneously urging firms to move their manufacturing operations stateside to bolster domestic production.
That prompted a flurry of U.S. investment commitments over recent months, including from Novartis, AstraZeneca, and Roche, as well as pricing adjustments from Novo Nordisk and Eli Lilly.
Autos
The U.S. and EU on Thursday said they had agreed to a conditional 15% tariff for European autos and auto parts bound for the U.S. — but only after Brussels introduces legislation to reduce their industrial duties, according to a senior administration official.
The official added that the mere introduction of EU legislation to reduce the rate of industrial tariffs would be enough to kick-start this trade-off.
“With respect to automobiles, the United States and the European Union intend to accept and provide mutual recognition to each other’s standards,” the U.S. and EU said in a joint statement published Thursday.
Under the terms of the trade framework struck in late July, the EU said it would eliminate the “already low” duties on industrial goods from the U.S.
Speaking late last month, Trump had hailed the initially disclosed framework agreement as the biggest trade deal ever made and one that promised to be “great for cars.”
The prospect of a 15% tariff rate on autos and auto parts represents a substantial reduction from the U.S. president’s threat to impose charges of 30%. It also nearly halves the existing tariff rate on Europe’s auto sector from 27.5%.
Industry groups had previously expressed deep concern about the costs associated with the tariff reality.
The German Association of the Automotive Industry, or VDA, which represents more than 620 companies involved in the German auto sector, warned a U.S. tariff of 15% on auto products would “cost German automotive companies billions annually and place a burden on them amid their transformation.”
More Americans filed for unemployment benefits last week, but U.S. layoffs remain in the same historically healthy range of the past few years.
Applications for unemployment benefits for the week ending Aug. 16 rose by 11,000 to 235,000, the Labor Department reported Thursday. That’s slightly more than the 229,000 new applications that economists had forecast.
Weekly applications for jobless benefits are seen as a proxy for layoffs and have mostly settled in a historically healthy range between 200,000 and 250,000 since the U.S. began to emerge from the COVID-19 pandemic more than three years ago.
While layoffs remain low by historical comparisons, there has been noticeable deterioration in the labor market this year and mounting evidence that people are having difficulty finding jobs.
U.S. employers added just 73,000 jobs in July, well short of the 115,000 analysts forecast. Worse, revisions to the May and June figures shaved 258,000 jobs off previous estimates, and the unemployment rate ticked up to 4.2% from 4.1%.
That report sent financial markets spiraling, spurring President Donald Trump to fire Erika McEntarfer, the head of the Bureau of Labor Statistics, which tallies the monthly employment numbers. The BLS does not contribute to the weekly unemployment benefits report except to calculate the annual seasonal adjustments.
The BLS reported earlier this week that the unemployment rate in Washington, D.C., eclipsed 6% in July, the third straight month that it was the highest in the U.S.
The rising D.C. jobless rate is a reflection of the mass layoffs of federal workers by Trump’s Department of Government Efficiency earlier this year. An overall decline in international tourism — a main driver of D.C.’s income — is also expected to have an impact on the climbing unemployment rate in the District.
Neighboring states of Maryland and Virginia, where many federal employees reside, also saw an uptick in unemployment rates in July.
Since the beginning of Trump’s second term, federal workers across government agencies have been either laid off or asked to voluntarily resign, spurring lawsuits from labor unions and advocacy groups.
Another recent report on the U.S. labor market showed that employers posted 7.4 million job vacancies in June, down from 7.7 million in May. The number of people quitting their jobs — a sign of confidence in finding a better job — fell in June to the lowest level since December.
Some major companies have announced job cuts this year, including Procter & Gamble, Dow, CNN, Starbucks, Southwest Airlines, Microsoft, Google, and Facebook's parent company, Meta. Intel and The Walt Disney Co. also recently announced staff reductions.
Many economists contend that Trump’s erratic rollout of tariffs against U.S. trading partners has created uncertainty for employers, who have grown reluctant to expand their payrolls.
The Labor Department’s report Thursday showed that the four-week average of claims, which softens some of the week-to-week swings, rose by 4,500 to 226,500.