The Dow Jones Industrial Average, an index of blue-chip companies, was heading for its worst day since 2020 on Wednesday as investors once again panicked over soaring inflation and a possible recession.
The Dow fell nearly 4% after a series of retailers posted disappointing results, its biggest drop since October 2020.
Shares of Target, one of the largest retailers in the United States, plunged 26% after the company pointed to rising cost pressures, stoking investor fears about inflation.
Target’s quarterly results also largely missed analysts’ expectations, sending its stock price tumbling to its worst day since 1987.
Other retailers echoed Target’s sentiment, saying their profits had been hit by slow sales, supply chain issues and soaring costs.
Shares of Dollar Tree, Dollar General and Costco Wholesale were also heading for their biggest declines in years.
The selloff marked a sharp setback from Tuesday, when markets rebounded after a strong performance by major tech stocks.
“Inflation affects every aspect of an earnings report, whether it’s on the transportation side or supply chain disruption,” said Nick Giacoumakis, chairman and founder of NEIRG Wealth Management on Wall Street. Log.
“Customers are no longer buying the most expensive items that they would usually buy. This all trickles down to a revenue report.”
Year-to-date, the S&P 500 is down 16.25%, while the Dow is down 11.25%.
Meanwhile, the Russell 2000 – America’s main small business index – has fallen 21.5% year-to-date, and the Nasdaq is down 25.75%.