Wall down as companies warn of rising costs

Wall Street stocks are moving in the red on Wednesday as another major retailer warned of rising cost pressures, reaffirming fears of inflation that has led the market to heavy losses so far.

In particular, o Dow Jones records losses of 459 units or 1.41% at 32,2195.28 units while o S&P 500 loses 71.95 points or 1.75% to 4,015.70 points. In the meantime, the Nasdaq slips by 243.68 points or 2.02% to 11,739.92 points.

It is noted that yesterday, the Dow rose 431 points or 1.3%, while the S&P 500 gained 2% and the Nasdaq strengthened almost 2.8%.

The losses at Wall come after its disappointing corporate results Target, whose quarterly earnings were cut in half and were much lower than Wall Street estimates due to higher fuel and transportation costs. The company’s share is “diving” over 25%.

Target’s announcement came a day after Walmart’s announcement, which was also lower than expected, as it spoke of higher fuel and labor costs. The company’s share is falling more than 3%.

“Any company based on households and purchases of non-essential goods is likely to suffer this quarter, as much of the revenue goes to food and energy,” said Jack Ablin, a senior Cresset Capital executive.

Other companies are also under pressure due to Target’s worse-than-expected results. In particular, SPDR S&P Retail ETF fell 5.24% while Best Buy lost 8.73%. At the same time, Dollar General slipped 12.11%.

Also, from the retail sector, the shares of Macy’s and Kohl’s fall 7.08% and 8,385 respectively.

The Dow has been falling for seven consecutive weeks, but shares have stabilized in the last three sessions. Last week, the S&P 500 fell to the brink of a bear market – or 20% below its record high – but the index has now gained 4% since closing Thursday.

Despite the recent recovery, the S&P 500 is down 14% for the year, while the Nasdaq has lost 23% so far.

Gas prices are rising steadily, contributing to inflationary pressures across the economy. The national average for a gallon of gasoline reached a record $ 4,567 on Wednesday, according to the AAA. Prices are 48 cents higher than a month ago and $ 1.52 higher than what consumers paid last year.

Each state now averages over $ 4 per gallon, with some states costing even more. In California, the state average has exceeded $ 6.

Shares and other risky assets have come under pressure from inflation and the US Federal Reserve (Fed) trying to curb price increases through interest rate hikes, which has led to concerns about a possible recession. Fed Chairman Jerome Powell said on Tuesday that “there will be no hesitation” about raising interest rates until inflation is brought under control.

However, some recent economic data, including the jobs report and the April retail sales data, still show that the US economy is growing.

At the macro of the dayUS housing construction began to decline in April, while building permits plunged, confirming concerns that rising mortgage rates would slow construction in the coming months.

In particular, home declines fell 0.2% to a seasonally adjusted annual size of 1.724 million units, according to the country’s Ministry of Commerce. Analysts’ average estimates in a Reuters poll put the starts at 1.765 million units.

The March figures were revised lower at 1.728 million units from the original 1.793 million units.

At the same time, building permits fell 3.2% to 1.819 million units.