Bad Walmart News May Be A Sign Of Bad Market News

( Walmart warned that inflation is hurting American consumers’ buying power, sending stocks down. S&P 500 plummeted 1.2%, Dow Jones Industrial Average declined 0.8%, and Nasdaq Composite sank 1.9%.

Walmart shares dropped after the retail giant slashed its profit projection for the second quarter and the whole year, claiming increasing food and gas prices are causing buyers to cut down on apparel. Technology and telecom stocks were also significant.

Walmart’s mid-quarter earnings warning highlighted concerns about rising inflation harming the retail industry. Other big chain stocks plummeted after Walmart’s Tuesday statement. Target declined 4.2%, Macy’s 6.5%, and Kohl’s 8%.

Investors fear inflation’s impact on firm profitability and U.S. consumers. Americans’ wallets are good owing to economic savings, but they’re being squandered on rising gas and food costs.

Better-than-expected corporate earnings reports spurred last week’s advances. Bond rates fell, easing pressure on equities after Fed rate rise expectations pushed yields higher this year.

Wednesday’s rate boost might be three times as large as usual. The central bank is fighting four-decade-high inflation. The predicted increase would place the Fed’s target rate between 2.25 to 2.5 percent, the highest since 2018.

Tuesday bond yields varied. The two-year Treasury yield jumped to 3.04 percent from 3.02 percent late Monday. 10-year yield declined to 2.79 percent from 2.82 percent, affecting mortgage rates.

Technology, merchants, and communication firms were S&P 500 index drags. Microsoft fell 3.5%, Amazon fell 5.3%, and Meta Platforms fell 4.5%.

Health care and utility stocks lost ground. Russell 2000 declined 0.6% as small company equities sank.

Investors awaited business earnings results.

General Motors shares slumped 3.1% after the firm announced its second-quarter earnings plummeted 40% from a year ago. Computer chip and parts shortages crippled plant productivity and dragged U.S. sales down 15%.

The Detroit carmaker earned $1.67 billion from April through June, less than a year before. GM couldn’t deliver 95,000 cars because it lacked components.

Shopify fell 15.3% after the Canadian e-commerce business said it’s reducing 10% of its personnel, or 1,000 jobs, due to a sales drop after the pandemic-fueled boom.

Alphabet and Microsoft, two of the most powerful tech companies in the world, will release their earnings after the market closes, with Meta, Apple, and Amazon following suit later in the week.