NY (AP) Stocks are increasingly being dragged lower early Tuesday following a warning from corporate giant Walmart that inflation was negatively impacting American consumers spending power.
The S&P 500 index was down 0.6% by 9: 55 a.m. Eastern. The Dow Jones Industrial Average lost 0.4% and the Nasdaq Composite was down noticeably more, falling 1%.
Walmart shares dropped nearly 9% following the retail giant cut its profit outlook for the next quarter and the entire year, saying rising charges for food and gas are forcing shoppers to lessen on discretionary items, particularly clothing, that carry higher income.
Walmarts profit warning in the center of the quarter is rare, and raised worries about how exactly the best inflation in 40 years has effects on the complete retail sector. The stocks of other major chains, including Target, Macys and Kohls, fell following Walmarts announcement.
Shares of automaker General Motors were also falling sharply, following the companys second-quarter profit fell 40% from the year ago, as computer chip and parts shortages hobbled factory output and drove the companys U.S. sales down a lot more than 15%.
The Detroit automaker earned $1.67 billion from April through June, well below the $2.79 billion it made per year earlier. GM couldnt deliver 95,000 vehicles through the quarter since it lacked parts.
Investors may also be seeking to the Federal Reserve, that is is likely to announce an interest rate hike as high as three-quarters of a share point on Wednesday, triple the most common margin. The central bank is waging an aggressive campaign to stem four-decade high inflation. The expected hike would put the Feds benchmark rate in a variety of 2.25% to 2.5%, the best since 2018.
Tech heavyweights Apple, Meta, Microsoft and Amazon are because of report their results later this week.