Wall Street fell sharply on Wednesday with Nasdaq leading the fall by nearly 5% as investors showed concerns of inflation to have an impact on earnings after Walmart and Target warned of rising cost pressures, confirming the fears over inflation.
Dow Jones closed 1,164.52 points lower or 3.57% at 31,490.07 points, while S&P 500 fell 4.04% and Nasdaq plunged 4.73%.
Walmart and Target reported their first quarter results this week where both companies had lower-than-expected EPS despite higher revenue growth than forecast.
Walmart reported adjusted earnings per share for its 1Q22 at $1.30 vs. $1.48 expected. Its share price fell 11.35% on Tuesday.
Meanwhile, Target’s shares fell nearly 25% yesterday after the earnings report and hit a 52-week low. Earnings per share was $2.19 adjusted vs. $3.07 expected.
Both companies had a partially common statement, saying that they are seeing a shift in consumer behaviour, moving toward essential goods versus discretionary merchandise. Meanwhile, both were seeing higher costs to execute their businesses.
