Stocks closed lower on Wall Street Tuesday after Walmart warned that inflation is negatively impacting American consumers’ spending power. The S&P 500 fell 45.79 points, or 1.2%, to 3,921.05 The Dow Jones Industrial Average fell 228.50 points, or 0.7%, to 31,761.54. The Nasdaq fell 220.09 points, or 1.9%, to 11,562.57. Walmart shares plunged 7.6% after the retail giant cut its profit outlook for the second quarter and the full year, saying rising prices on food and gas are forcing shoppers to cut back on more profitable discretionary items, particularly clothing.
Walmart’s profit warning in the middle of the quarter is rare, and raised worries about how the highest inflation in 40 years is affecting the entire retail sector, the AP reports. Stocks of other major chains fell following Walmart’s announcement, made after Wall Street's closing bell on Tuesday. Target dropped 3.6%, Macy’s slid 7.2%, and Kohl’s fell 9.1%. Technology stocks, retailers, and communication companies were among the biggest drags on the benchmark S&P 500 index. Microsoft was down 2.7%, Amazon slid 5.2% and Facebook owner Meta Platforms dropped 4.5%.
Shares of automaker General Motors fell 3.5% after the company said its second-quarter profit fell 40% from a year ago. Shopify slumped 13.6% after the Canadian e-commerce company said it is cutting 10% of its staff, or about 1,000 employees, as it reckons with an unexpected sales downturn after pandemic-fueled growth. After the closing bell, Microsoft reported fiscal fourth-quarter profit of $16.7 billion, or $2.23 per share, falling short of analyst expectations for $2.29 per share, per the AP. The company blamed a number of "evolving macroeconomic conditions and other unforeseen items," including shutdowns in China and the war in Ukraine, for the disappointing performance.
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