Retail earnings push the stock market lower

retailer shares

Goal

Sink 24% after the company announced a quarterly Missed Gains Analysts forecast, affected by supply chain costs and inflationary pressures. If this decline continues during the trading day, it will be the worst day for the company’s stock performance since the market crash in October 1987.

Walmart

WMT -6.24%

Shares slumped 5.7%, extending their 11% decline Tuesday after the retailer reported it was getting the shares Shrinking due to rising food prices and other increased costs. shares

Dollar Tree Company.

DLTR -15.52%

17% while

Dollar General Corporation.

DJ -10.83%

He lost 12%. shares

Costco wholesale company.

decreased 11%.

“We are seeing a continuous shift in the composition of consumption, away from goods and back into services,” said Garrett Melson, portfolio strategist at Natixis Investment Managers. “Of course, this will weigh on these merchandise retailers.”

Consumer goods and discretionary goods were the worst performers on Wednesday, down 4.3% and 4.2%, respectively.

Stocks have fallen largely in recent weeks as investors ponder the global economic outlook, central banks’ plans to tame inflation, geopolitical tensions and an epidemic-free China strategy. The peak of the factors led to increased volatility in the markets. Even with Tuesday’s rally, the S&P 500 is down about 16% this year.

At the forefront of investors’ minds is decades of high inflation in the US, how well policy makers are willing to tighten financial conditions to subdue it and what that means for economic growth. Federal Reserve Chairman Jerome Powell said on Tuesday that the central bank’s determination to combat inflation should not be called into question, Even if it means raising the unemployment rate.

“We expect growth to start to slow over the next few months,” said Salman Ahmed, global head of macroeconomics at Fidelity International, adding that he expected the Fed’s actions to help curb inflation. “Then the Fed’s next step will be to focus on the growth shock.”

The mix of fears hitting the markets drove Mr. He said Ahmed would adopt a more cautious investment approach in recent weeks.

Investors are also watching whether Russia’s war against Ukraine could heighten geopolitical tensions. Finland and Sweden I officially applied for membership in NATO On Wednesday, a move that, if approved, would fundamentally change the security landscape in northern Europe.

In the bond markets, the return on the index 10-year treasury bonds It fell to 2.938% from 2.969% Tuesday. Yields and prices move inversely.

Brent crude, the international oil benchmark, fell 1.2 percent to $110.57 a barrel. Oil prices have been highly reactive in recent months for both Russia’s war against Ukraine, which may disrupt supplies, and the shutdowns of major Chinese cities reducing demand. Shanghai government started Preparing the city for reopening.

Offshore, the Stoxx Europe 600 Continental Index was down 0.7%. Sterling fell 0.6% against the dollar after new figures showed that annual inflation in the UK reached a four-decade high of 9% in April as energy prices rose through household utility bills.

In Asia, new data showed that Japan’s economy shrinks In the first three months of this year, when restrictions related to the resurgence of Covid-19 infections hampered consumer spending. Despite this, Japan’s Nikkei 225 index closed 0.9% higher.

Both Cosby in South Korea and Hang Seng in Hong Kong added 0.2% on Wednesday. China’s Shanghai Composite Index is down 0.2%.

Write to Caitlin Ostroff at [email protected]

Corrections and amplifications
Federal Reserve Chairman Jerome Powell said on Tuesday that the central bank’s determination to combat inflation should not be called into question. An earlier version of this article incorrectly stated that mr. Powell said this Wednesday. (Corrected May 18).