Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis.

Good afternoon. Today is Thursday, May 15th, and I'm your host, Kim Conn. Our top story so far,

Walmart management warned during their earnings call and in interviews that tariffs could lead to higher prices for

U.S. consumers.

CFO, David Rainey, said, we're wired for everyday low prices, but the magnitude of these

increases is more than any retailer can absorb.

It's more than any supplier can absorb.

And I'm concerned that consumers are going to start seeing higher prices.

You'll begin to see that likely towards the tail end of

this month, and certainly much more in June. CEO Doug McMillan said the company will do its

best to keep consumer prices as low as possible, but due to the magnitude of the tariffs,

even at the reduced levels announced this week, the company can absorb all the pressure

given the reality of narrow retail margins.

Walmart held off issuing Q2 EPS and operating income guidance with its report.

The warning on prices wiped out pre-market gains seen after Walmart released its Q1 results.

Comparable sales in the U.S. rose 4.5% to top the consensus estimate of 3.9%. It was a busy morning on the macro

front. Wholesale inflation fell unexpectedly in April, with the producer price index down 0.5%

compared to the 0.2% rise expected, and flat in March, revised from down 0.4%. The annual rate fell to 2.4% from 3.4% prior, revised up sharply from 2.7%.

That was lower than the 2.5% consensus. Over 40% of the April decline in the index for final

demand services is primarily due to margins for machinery and vehicle wholesaling, which fell 6.1%.

Economist Joseph Brasuelas says, this is evidence that trade policy is resulting in margin compression,

which will then result in consumers absorbing higher prices starting in May.

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