NEW YORK (AFP) – Wall Street stocks tumbled on Tuesday (July 26) on worries about weakening consumer health following Walmart’s downgrade of its earnings outlook and lacklustre US economic data.
Shares of Walmart plunged 7.6 per cent after it trimmed its profit forecast to reflect increased consumer spending for food, gasoline and other staples that is depressing demand for goods with higher profit margins.
Also Tuesday, the Conference Board’s monthly survey showed consumer confidence dropped to 95.7 from 98.4 as inflation continues to dent sentiment.
The “increased pessimism is consistent with our view that consumer spending and the broader economy are downshifting to a much slower growth path amid high inflation, rapidly-rising interest rates, and financial market volatility,” said Lydia Boussour of Oxford Economics.
The Dow Jones Industrial Average finished with a loss of 0.7 per cent at 31,761.54.
The broad-based S&P 500 dropped 1.2 per cent to 3,921.05, while the tech-rich Nasdaq Composite Index fell 1.9 per cent to 11,562.57.
The losses came as the Federal Reserve kicked off a two-day monetary policy meeting expected to conclude with another large interest rate hike.
Among companies reporting results, General Motors fell 3.4 per cent as it reported a 40 per cent drop in profits due to supply chain problems and said it would limit hiring.
But Coca-Cola (+1.6 per cent), 3M (+4.9 per cent) and McDonald’s (+2.7 per cent) all gained after reporting results.
Large tech companies were under pressure ahead of key earnings results, with Amazon losing 5.2 per cent and Facebook parent Meta Platforms shedding 4.5 per cent.