The Dow Jones Industrial Average fell 228 points on Tuesday as retail stocks dragged the market down. File Photo by John Angelillo/UPI | License Photo
July 26 (UPI) -- U.S. markets declined Tuesday as retail stocks fell on the heels of a negative earnings outlook from Walmart.
The Dow Jones Industrial Average fell 228.5 points, or 0.71%, while the S&P 500 dropped 1.15% and the Nasdaq Composite closed the day down 1.87%.
Walmart stock fell 7.64% Tuesday after the big-box retailer cut its quarterly and full-year profit guidance, citing the impact of inflation on consumer spending, after the bell on Monday.
Other retailers also struggled Tuesday with Kohl's stock dropping 9.13%, Macy's falling 7.24% and Target sliding 3.63%.
"The most important thing from the Walmart announcement is how inflation is changing what people buy," said Robert Cantwell, portfolio manager at Upholdings. "Food now makes up a bigger share of individuals' budgets, but overall spending still generally remains intact."
The negative impacts also extended to e-commerce stocks with Shopify dropping 14.48% after the payments provider said it would lay off about 10% of its global workforce due to declining online spending ahead of its earnings report Wednesday.
Shares of PayPal also fell 5.65% while Amazon dropped 5.23%.
A flurry of major corporate earnings also impacted the market Tuesday, with McDonald's stock rising 2.63% as it reported mixed second-quarter results and Coca-Cola stock gaining 1.62% after posting an earnings beat.
General Motors stock declined 3.53% -- despite the Energy Department announcing a $2.5 billion loan for its joint venture with LG to build electric vehicle battery cell plants -- as the automaker reported an earnings miss, citing supply chain issues.
Google parent, Alphabet, also presented mixed earnings, reporting $1.21 earnings per share, compared to $1.32 expected by analysts, while ad revenue was $56.29 billion, exceeding analysts' expectations of $56.14 billion.
Shares of Alphabet fell 2.32% during regular trading but bounced back 2.83% after hours.
Tuesday's decline also came as the International Monetary Fund downgraded its global economic growth projections for both 2022 and 2023 calling the outlook "gloomy and more uncertain."
The Federal Reserve on Tuesday began its two-day policy meeting with the central bank expected to again hike interest rates by as much as .75%.