Wall Street closed again with losses and the S&P 500 plummets 4%

Stocks closed lower on Wall Street on Wednesday as Target’s dismal results renewed fears that inflation is hitting US businesses.

The S&P 500, the benchmark for many mutual funds, fell 4%. Target lost a quarter of its value, trailing other retailers, after saying its profit halved in the latest quarter as shipping and transportation costs soared.

It was the worst loss in a day for him. S&P 500 since June 2020. Meanwhile, the Dow’s one-day loss was the biggest drop from the average since June 2020 and was the Dow’s lowest close since March 2021.

This comes a day after Walmart cited inflation as the cause of its own weak results. The Dow Jones Industrial Average fell 1,164 points, or 3.6%, and the tech-heavy Nasaq fell 4.7%.

Treasury yields fell as investors sought safer ground.

“We think the impact on retail spending, because inflation has outpaced wages for longer than expected, is the main factor causing the market to sell off today,” said Paul Christopher, head of global market strategy at the Wells Fargo Investment Institute. “Retailers are beginning to reveal the impact of the erosion of consumer purchasing power.”

The chain store target it lost a quarter of its value after reporting that its results were affected by high costs, which dragged down other companies. For their part, Dollar Tree, Dollar General and Best Buy lost more than 10%.

The disappointing report target It comes a day after the market applauded an encouraging Commerce Department report that showed retail sales rose in April, driven by rising car and electronics sales and higher restaurant spending.

Rising inflation, the conflict in Ukraine, prolonged supply chain disruptions, pandemic-related shutdowns in China, and the prospect of aggressive monetary policy tightening have all weighed on markets recently, stoking concerns about a global economic slowdown.

Stocks have been struggling to climb out of a slump for the past six weeks, as investor concerns mount. Trading has been choppy on a daily basis and investors are closely watching any data from retailers and consumers as they try to gauge the impact of inflation and whether it will cause spending to slow. A larger-than-expected impact on spending could signal slower economic growth going forward.

(With information from Reuters and AP)