Walmart Stock Rises 13.9% in October, Strongest Month Since 2014

Walmart shares have risen 13.9% so far in October, putting the stock on course for the strongest month since November 2014, when Walmart gained 14.8%. The S&P 500 has advanced 0.6% over the same period. Walmart's lead of 13.3 percentage points is the largest monthly gap since March 2020, when COVID-19 lockdowns began in the United States.

Walmart has outperformed the S&P 500 by at least 10 percentage points in a month on 30 occasions since 1985. Seven of those months occurred during recessions, when investors were already seeking defensive stocks. Three of the other 23 months occurred within a year before a recession began. Every U.S. recession since 1990, apart from the abrupt pandemic recession in 2020, was preceded by such a month. However, the signal produced 20 false warnings. The S&P 500 stood higher 12 months later in 19 of the 23 cases outside recessions, with an average increase of 9.7% and a median increase of 14.4%. Large Walmart rallies can precede recessions, but most such rallies are not followed by a recession.

Households facing prices that rise faster than wages initially reduce postponable purchases, including travel, electronics and clothing. Households then direct more of the remaining budget toward necessities and lower-priced stores. Discount retailers consequently attract customers while discretionary retailers lose customers. Consumer prices rose 3.7% through September, compared with 3.4% in August. The University of Michigan's preliminary October consumer sentiment index dropped to 46.3. The reading was the survey's second-lowest, above only May's 44.8.

BofA Global Research analysts Lorraine Hutchinson and Mary Sport identified similar consumer pressures in an October 19 report ahead of the holiday season. Hutchinson and Sport said broad inflation posed the greatest sales risk for the companies the analysts cover because higher oil prices affect consumer prices. The State Street Consumer Staples Select Sector SPDR ETF (XLP) has gained 9.5% in October. XLP has risen 13.5% this year. The State Street Consumer Discretionary Select Sector SPDR ETF (XLY) has gained 5.5% this month. However, XLY remains down 4.3% in 2026.

Walmart's rally also reflects developments specific to the company. Benzinga Analyst Ratings shows that Deutsche Bank upgraded Walmart from Hold to Buy on October 15. Benzinga Analyst Ratings also shows that Deutsche Bank increased Walmart's price target from $113 to $136. Evercore ISI increased Walmart's price target from $125 to $130 on October 20. BofA Global Research analyst Christopher Nardone highlighted Walmart's advertising operation after meeting the head of Walmart Connect U.S. Nardone described Walmart as "emerging as an agentic winner" in commerce driven by artificial intelligence.

The rally also partly reflects a recovery from earlier weakness. At least seven firms reduced Walmart's price targets on August 21. Walmart has gained only 6.2% this year despite October's advance.

Polymarket traders assign a 7.5% probability to a U.S. recession by the end of 2026. Polymarket traders assign a 35% probability to a U.S. recession by the end of 2027. Walmart's October performance resembles rallies before the recessions of 1990, 2001 and 2008, but comparable rallies have also occurred without a subsequent recession. The signal alone indicates more cautious consumers rather than a date for a recession.