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The Dow Jones Industrial Average headed for its biggest loss since 2020 on Wednesday after another major retailer warned of rising cost pressures, confirming investors’ worst fears over rising inflation and rekindling the brutal 2022 selloff.
The index tumbled 1,164.52 points, or 3.6%, to close a disastrous session at 31,490.07, its first loss in four days.
The S&P 500 weakened 165.17 points, or 4%, to 3,923.68, also the worst drop since 2020.
The NASDAQ Composite unloaded 566.37 points, or 4.7%, to 11,418.15.
Markets returned to heavy selling after two back-to-back quarterly reports from Target and Walmart stoked investor fears of rising inflation.
It’s the fifth Dow decline of more than 800 points this year, which all occurred as the stock sell-off intensified within the last one month.
Target shares tumbled more than 27% Wednesday after the retailer reported first-quarter earnings that were much lower than Wall Street estimated because of higher costs for fuel and compensation. The retailer also saw lower-than-expected sales for discretionary merchandise like TVs.
Target’s report comes right after Walmart on Tuesday posted earnings that fell short of expectations as it too cited higher fuel and labour costs. Walmart shares ended Tuesday lower by 11%. They were down another 7% on Wednesday.
Amazon’s stock price dropped 6.6%, and Best Buy’s stock price fell more than 11%. Dollar General’s fell more than 11%, and Dollar Tree’s declined more than 15%. Shares of Macy’s dropped 12%, while shares of Kohl’s fell more than 10%.
Lowe’s fell more than 6% after missing sales expectations in its first quarter report as shoppers bought fewer supplies for outdoor projects.
TJ Maxx-parent TJX Companies bucked the overall negative trend, with shares surging 6% after the retailer reported an earnings beat.
Treasury prices gained ground, lowering yields to 2.88% from Tuesday’s 2.99%. Treasury prices and yields move in opposite directions.
Oil prices dropped $3.13 at $109.27 U.S. a barrel.
Gold prices removed $3.70 to $1,815.20 U.S. an ounce.
