Bad results from major U.S. retailers slipped Wednesday, extending Wall Street’s volatility for the year.
The Dow Jones Industrial Average fell more than 1,000 points in the afternoon trade, down 3.3%. The S&P 500 fell 3.7%, while technology-focused Nasdaq Composite fell 4.4%. It became a U-turn from Tuesday when technology stocks were present Led to a resurgence In the markets.
Leading retailers said their profits have been hit by rising prices, sluggish sales and supply chain disruptions. Shares The goal The company fell 27% after the quarter Missed revenue The expectations of analysts, it puts it on its path Poor one day performance Since Black Monday in 1987. Shares of Dollar Tree, Dollar General and Costco Wholesale also fell sharply over the years.
Retailers’ decisions have prompted Wall Street to wrestle anew with the idea that the global economy could go into recession. Although the dispute has not yet been resolved, it has spurred stocks and other risky assets throughout the year.
Being at the forefront in the minds of investors is the high inflation that has plagued the United States for decades, how much policymakers are willing to tighten financial conditions to suppress it and what economic growth means. Federal Reserve Chairman Jerome Powell said on Tuesday that the central bank’s commitment to tackling inflation should not be questioned. Although it does increase unemployment.
Nick Giacoumakis, President and Founder and CEO of NEIRG Wealth Management, says, “Inflation affects every aspect of a return statement, whether it is the traffic side or the supply chain.” Consumers generally do not buy expensive items.
Russia’s war in Ukraine and China’s zero-Govt strategy have shaken markets, and the declines are widespread. Bonds, usually as a haven, are falling along with stocks.
Shares of Walmart fell 6.6%, extending a fall of 11% on Tuesday, after the retailer announced it was receiving it. It was crushed by rising food prices And other rising costs. Shares of Lowe fell 5.4%, announcing that home improvement retailer comparable-store sales were weaker than expected.
“We see a continuous shift in the consumption mix, moving away from products and towards services,” said Garrett Melson, portfolio strategist at Natixis Investment Managers. “Naturally, this is going to weigh on retailers of these products.”
Consumer preferences and consumer staples were the worst-performing sectors, down 6.8% and 6%, respectively. Both sectors are on track for the biggest single-day losses since March 2020.
“Our expectation is that growth will begin to slow in the next few months,” said Salman Ahmed, global chairman of Fidelity International’s Macro. “Then the central bank’s next step is to focus on growth shock.”
The combination of concerns affecting the markets has led Mr. to pursue a more cautious investment approach in recent weeks. Ahmed led the way, he said.
Investors are also watching to see if Russia’s war against Ukraine will exacerbate geopolitical tensions. Finland and Sweden Formally applied for membership of NATO On Wednesday, an action, if approved, would fundamentally change the security landscape of northern Europe.
In bond markets, yield on the scale 10 year treasury note It fell to 2.892% from 2.969% on Tuesday. Yields and prices move in the opposite direction.
Brent crude was down about 2.7% at $ 108.95, the international standard for oil. Oil prices have reacted sharply in recent months to both Russia’s war against Ukraine and the disruption of supply and locks in key Chinese cities that are reducing demand. The Shanghai government has begun Preparing the city for reopening.
Overseas, the Pan-Continental Stoxx Europe 600 fell 1.1%. The British pound fell about 0.6% against the dollar after new figures showed that the UK had reached annual inflation. Four decades high 9% higher energy prices in April were provided by households.
In Asia, new data showed it Japan’s economy shrinks In the first three months of this year, restrictions on the re-emergence of Govt-19 infections prevented consumer spending. Despite that, Japan’s Nikkei 225 ended 0.9% higher.
South Korea’s Kospi and Hong Kong’s Hong Cheng added 0.2% each on Wednesday. China’s Shanghai Composite fell about 0.2%.
Corrections & Multiplications
Federal Reserve Chairman Jerome Powell said on Tuesday that the central bank’s commitment to tackling inflation should not be questioned. An earlier version of this article was published on Wednesday by Mr. (Edited May 18.)
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