The stock market selloff resumed on Wednesday amid reinvigorated fears about surging inflation weighing on economic growth, as several major retailers have now reported that quarterly profits took a hit due to rising cost pressures.
The selloff on Wall Street intensified: The Dow Jones Industrial Average fell 3.6%, over 1,100 points, while the S&P 500 lost 4% and the tech-heavy Nasdaq Composite 4.7%.
Markets tanked after disappointing quarterly earnings from major retailers: Shares of Target plunged over 25% after the company warned of rising costs and supply chain issues impacting profits, with the stock on pace for its worst single-day drop in roughly 25 years.
The news followed a gloomy outlook from Walmart, with the nation’s largest retailer badly missing earnings expectations due to rising costs, causing shares to fall 11% on Tuesday in their largest one-day drop since 1987.
Both results are weighing heavily on markets Wednesday—with the S&P 500 Retail ETF falling more than 5%—amid fears that American consumers are feeling the impact of surging inflation.
Other major retailers—many of which have upcoming quarterly earnings in the next week—saw their stocks plunge: Best Buy, Dollar General, Dollar Tree, Macy’s and Kohl’s all fell by 8% or more.
The market declines come after stocks mounted a small comeback on Tuesday when the Dow jumped 400 points after Federal Reserve Chair Jerome Powell said the central bank “won’t hesitate” to keep raising rates until they see inflation moderate to healthier levels.