Advertisement

Dow Jones takes biggest drop since 2020 as retailers pull back on estimates

1/4
Dow Jones takes biggest drop since 2020 as retailers pull back on estimates
The Dow Jones Industrial Average plunged Wednesday, dropping 1,164 points for its worst decline since 2020. File Photo by John Angelillo/UPI | License Photo

May 18 (UPI) -- The Dow Jones Industrial Average plunged Wednesday, dropping more than 1,100 points for its biggest drop since 2020.

The index was down 1,164.52, or 3.57% at the end of trading Wednesday over fears of rising costs affecting major retail chains.

Advertisement

The Nasdaq fell further, dropping 4.73%, while the S&P 500 was in the red 4.04%.

The Nasdaq's drop was its sharpest since May 5.

RELATED Dow Jones rises 431 points as markets stage rally after losing streaks

Wednesday's decline reverses gains made Tuesday when U.S. markets rallied behind surging tech stocks. The Dow saw a 431.17-point gain Tuesday.

Retail giant Walmart's shares fell 6.79%, dropping for a second day in a row after it announced Tuesday it would significantly miss its earnings targets. The company blames supply chain issues, a rising cost of labor and the high cost of fuel, among other factors.

Other major retailers are feeling a similar crunch.

RELATED Inflation rises in Britain by 9%; steepest surge in 40 years

Target stock tumbled 24.93% after reporting first-quarter earnings that fell well short of Wall Street's expectations.

Dollar Tree stock plummeted 14.42%, Dollar General declined 11.11%, Kohl's slid 10.89%, Macy's dropped 10.7%, Best Buy fell 10.51%, Amazon dipped 7.16% and Home Depot's stock fell 5.16% after climbing Tuesday behind better-than-expected earnings data.

Advertisement

The U.S. Federal Reserve continues to signal it will enact further hikes to the base interest rate, in an effort to cool record inflation levels, worrying investors and leading to massive sell-offs.

RELATED Despite inflation, retail sales in U.S. rise by almost 1% in April

"I think what investors realized was these seemingly safe haven stocks, the staples like Target, like Walmart, are not immune -- that their costs are rising, they cannot pass their higher costs onto their consumers," Cresset Capital chief investment officer Jack Ablin said in an interview with Yahoo Finance.

"And as Walmart said yesterday, their customers are coming in and buying groceries, but they're not buying hard goods, they're not buying other products where they have a slightly higher margin."

Latest Headlines

Advertisement
Advertisement

Follow Us

Advertisement