Blaming rising inflation or fears of a recession, many U.S. stocks fell like a nine-pin on Wednesday. The Nasdaq 100, the S&P 500, and the Dow Jones Industrial Average, the three leading U.S. indices, have all fallen sharply as corporate income outlook weighs heavily on the outlook. Overall, U.S. stocks posted the biggest daily drops in nearly two years as investors assessed the impact of higher prices on earnings and the possibility of tightening monetary policy on economic growth. The risk of a recession witnessed during the 2008-2009 global financial crisis could be one of the reasons for such a large fall in stock prices.
The selloff sent the S&P 500 down 4%, the most since June 2020, surpassing 6% in consumer shares. Target Corporation has lost more than 20% in its worst way since 1987, after cutting its profit forecast due to rising costs. The main focus of the retail day was on missing out on TGT’s large earnings under margin pressure, where inflationary pressures and changes in consumer spending were discussed, but it was also widely observed that consumers were resilient.
Walmart Inc. From Macy’s Inc. Until retailers ’shares were caught in the downdraft.
The Nasdaq 100 fell the most among the major benchmarks, with growth-related technology stocks sinking by more than 5%. Megacaps Apple Inc. And Amazon.com Inc. slipped more than 5%
Cisco Systems Inc., the largest maker of computer-networking equipment, said it would lose revenue in the current quarter due to Chinese lockdowns and disruptions caused by the Ukraine war. Cisco is quoting 12 percent less in the after-hours trading session.
Other cyclical and consumer-connected groups were also significantly weaker, including restaurants, homeowners, homeowners, autos, food / beverage, transportation and banks.
Fugitive inflation leads to weak earnings and severely hits market sentiment. The disappointing quarterly numbers from Retail Giant Target and Low are threatening the market today. On the other hand, there is also strong retail sales data. On the upside, any indication that demand is not hurting will be seen as a positive factor.
The Fed’s fight against inflation is seen as the biggest factor in managing economic growth. Investors can expect higher volatility in the weeks and months ahead as long-term investors prepare their investment plans in advance.