U.S. stock indexes fell on Wednesday as a rally of rising stocks faded and retailers fell short of the target after being the latest victims of rising prices.
Shares of Target Corporation fell 25.1% after the S&P 500’s first-quarter profit halved, and the company warned of a big margin injury on rising fuel and freight costs.
Shares of other retailers such as Walmart Inc, Gap Inc, Kohl’s Corp, Nordstrom Inc, Costco, Best Buy, Macy’s Inc and Dollar General Corp fell 4.1% to 11.8%.
All of the 11 major S&P sectors declined in morning trade, with consumer-led and consumer-focused sectors down 3.5% each.
“Input costs are very important to retailers. Until the supply chain is disrupted and labor costs are reduced, we’re going to see retailers struggle,” said Brooke May, managing partner at Evans May Wealth in Indianapolis.
Rising inflation, the conflict in Ukraine, protracted supply chain snarls, an epidemic-related lockdown in China and the possibility of the central bank tightening aggressive policies have recently weighed on the market, raising concerns about the global economic downturn.
Federal Reserve Chairman Jerome Powell told the Wall Street Journal on Tuesday that the US Federal Reserve would continue to “push” on the rate hike until it sees inflation come down in a “clear and credible way”, if not, it will not hesitate to move more aggressively. Will happen
Traders are set to raise interest rates by 50 basis points by the Fed in June and July.
“The market is very concerned about the high rates and the potential overshooting of the Fed and the softening of the economy,” May said.
“The higher rates will obviously eat up retail costs in addition to corporate profits and the market is just trying to digest it.”
The S&P 500 is still down 15.6% in 2022 and the Nasdaq is down more than 24%, affected by rising stocks.
Rate-sensitive big tech and growth companies such as Microsoft Corp, Apple Inc., Google Owners – Alphabet Inc, Meta Platforms, Tesla Inc and Amazon.com fell sharply from 1.7% to 4% after leading sharp rebounds on Wall Street in previous sessions.
At 10:09 am ET, the Dow Jones Industrial Average was down 488.86 points, or 1.50%, at 32,165.73, the S&P 500 was down 69.72 points, or 1.71%, at 4,019.13, and the Composite, 2016 points, or Nas, was down 30,30%. %, At 11,781.44.
Lowe’s Cos Inc fell 2.1% after reporting expected-to-expected declines in same-store sales, as demand for its home improvement equipment and construction materials fell from the height of the epidemic.
However, TJX Cos Inc’s 11% rise helped annual profit prices rise after discount store operator forecasts.
The CBOE Volatility Index, also known as the Wall Street Fear Measure, rose to 27.84 points after falling for six consecutive sessions.
The 2.76-to-1 ratio on the NYSE and the 1.94-to-1 ratio on the Nasdaq have outperformed the declining numbers.
The S&P index recorded a new 52-week high and 30 new lows, while Nasdaq recorded 26 new highs and 90 new lows.