US stocks experience worst day since 2020 amid recession fears | Business Newsletter
The Dow Jones Industrial Average, an index of blue chip companies, headed for its worst day since 2020 on Wednesday as investors once again spooked over soaring inflation and the potential recession potential.
The Dow fell nearly 4% after a string of retailers posted disappointing results, its biggest drop since October 2020.
Shares of Target, one of the largest retailers in the US, fell 26% after the company indicated that cost pressures were mounting, stoking investor concerns about inflation.
Target’s quarterly results also missed analyst expectations, sending the company’s stock price down to its worst day since 1987.
Other retailers also objected to Target’s position, saying their profits were hit by slow sales, supply chain problems and rising costs.
Shares of Dollar Tree, Dollar General and Costco Wholesale also posted their biggest declines in years.
The sell-off marked a sharp reversal from Tuesday, when the market bounced back from a strong performance in key tech stocks.
“Inflation is affecting every aspect of the earnings report, whether it’s transportation or supply chain disruptions,” Nick Giacoumakis, president and founder of NEIRG Wealth Management, told the Wall Street Journal.
“Customers are no longer buying the more expensive items they normally buy. All of this translates to the income statement.”
Since the start of the year, the S&P 500 is down 16.25%, while the Dow is down 11.25%.
Meanwhile, the Russell 2000 index – the main index of smaller US companies – is down 21.5% since the start of the year and the Nasdaq is down 25.75%.