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Walmart ( WMT ) slides after missing quarterly profit expectations

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July sales of existing U.S. homes unexpectedly rose

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Coty ( COTY ) plunges on weak U.S. spending forecast

(Recasts with preliminary close of trading)

By Johann M Cherian, Sanchayaita Roy and Carolina Mandl

Aug 21 (Reuters) -

Wall Street's main indexes fell on Thursday as investors

feared potentially hawkish remarks by the Federal Reserve chair

on Friday that could spark volatility, while big-box retailer

Walmart's ( WMT ) quarterly results dampened sentiment.

All eyes are on the Jackson Hole Economic Policy Symposium

where Fed Chair Jerome Powell is scheduled to speak on Friday at

10 a.m. ET. Traders will closely monitor his speech for any

clues on U.S. interest rate cuts in September following recent

job market weakness.

"We still have roughly 80% likelihood that the Fed will cut

interest rates, but that is now being brought into question. So

that is, in a sense, being worked into investors' forecasts,"

said Sam Stovall, chief investment strategist at CFRA Research.

"Investors are saying, 'You know what? Let's take some profits

right now.'"

Traders have pared down bets on a 25-basis-point

interest rate cut in September to 79% from 99.9% last week,

according to data compiled by LSEG.

Thin August trading volumes are likely to

magnify

any market moves following Powell's comments.

Multiple policymakers, including Cleveland Fed President

Beth Hammack, Atlanta President Raphael Bostic and Kansas City

Fed President Jeffrey Schmid, have struck a cautious tone and

acknowledged the need to stay data-dependent.

"Jitters over what's going to transpire tomorrow at Jackson

Hole is certainly weighing on risk appetite a little bit with

Chair Powell's speech," said Adam Turnquist, chief technical

strategist for LPL Financial. "There could be a decent selloff

if we get a more hawkish than expected event."

A private report indicated business activity picked up

pace in August, reflecting a complex environment for the U.S.

central bank, which will deliberate on interest rates next

month. Another report also showed July sales of existing U.S.

homes unexpectedly ticked higher.

Yields on U.S. Treasuries rose following the reports, also

helping drive stocks lower.

According to preliminary data, the S&P 500 lost 25.63

points, or 0.40%, to end at 6,370.15 points, while the Nasdaq

Composite lost 72.54 points, or 0.34%, to 21,100.31. The

Dow Jones Industrial Average fell 154.56 points, or

0.34%, to 44,783.75.

Most of the 11 S&P 500 sectors were down, led by consumer

staples, which declined after Walmart ( WMT ) raised its fiscal

year sales and profit, driven by strong demand from shoppers

across all income levels, but missed quarterly profit estimates

and flagged higher costs from tariffs.

Shares of the retailer tumbled. The spotlight was on reports

from retailers, including Target ( TGT ) and Home Depot ( HD ),

this week as investors gauged the impact of U.S. tariffs on

consumer spending.

"There's a bit of a mixed picture within the consumer space

and there's uncertainty in the economy - whether that's the job

market or whether that's prices (increasing) from a tariff

pass-through," said Chris Zaccarelli, chief investment officer

at Northlight Asset Management.

A technology stocks selloff earlier this week appeared to

lose some steam, but Nvidia ( NVDA ), Meta, Amazon.com ( AMZN )

and Advanced Micro Devices ( AMD ) remained weaker.

The selloff signaled investor fears that tech stocks, which

have soared from April lows, are overvalued, while Washington's

growing interference in the sector has also raised alarms.

Among other market movers, Coty ( COTY ) shares plummeted

after the beauty products maker forecast lower current-quarter

sales on weak U.S. spending.