The New York stock market fell as investor sentiment worsened due to WalMart earnings warning ahead of earnings announcements of large tech companies.
At the New York Stock Exchange (NYSE) on the 26th (Eastern Time), the Dow Jones Industrial Average closed at 31,761.54, down 228.50 points (0.71%) from the previous day.
The Standard & Poor’s (S&P) 500 index fell 45.79 points (1.15%) to 3,921.05 from the battlefield, and the Nasdaq index, centered on technology stocks, closed at 11,562.57, down 220.09 points (1.87%) from the battlefield.
Investors are keeping an eye on corporate earnings reports and the results of the Federal Open Market Committee (FOMC) regular meeting to be announced the next day.
As WalMart lowered its net profit forecast on the grounds of inflation, concerns about corporate earnings grew.
Walmart has lowered its earnings forecasts for the second quarter and this year, saying consumer spending on general merchandise is being hit by inflation. Walmart shares fell 7.6% on the news.
Shares of other retailers also fell, with shares of Target and Coles falling more than 3% and more than 9%, respectively. Shares of Amazon and Dollar Tree fell more than 5% and 6%, respectively, while those of Costco fell more than 3%.
Canadian e-commerce company Shopify announced that it would cut 10% of its global workforce, also weighing on investor sentiment. Shares of Shopify, a New York-listed company, fell about 14%.
German sportswear company Adidas also lowered its earnings forecast. This suggests that retailers are being hit by the global economic slowdown.
General Motors (GM), which announced its pre-opening earnings, also fell more than 3% on the news that its quarterly earnings fell short of expectations due to supply chain disruptions.
McDonald’s shares jumped more than 2% after reporting better-than-expected quarterly earnings.
Coca-Cola’s stock rose more than 1% after reporting better-than-expected earnings amid strong demand despite currency headwinds.
UPS, 3M and General Electric (GE) all reported better-than-expected earnings, but stock prices were mixed. UPS shares fell 3%, while shares of 3M and GE both rose more than 4%.
On this day, after the market close, Microsoft and Alphabet announce their earnings.
The market is also keeping an eye on the results of the July FOMC scheduled for the next day.
The Federal Reserve (Fed) is expected to raise its key interest rate by 0.75 percentage points at the FOMC regular meeting in July. However, traders in the interest rate futures market see a 25% chance that the Fed will raise rates by 1.00 percentage points.
The International Monetary Fund (IMF) has also lowered its global growth forecast amid growing concerns about a recession.
The International Monetary Fund (IMF) lowered its global growth forecast for this year from 3.6% to 3.2%, and also downgraded its global growth forecast for next year to 2.9% from 3.6%.
The US growth forecast for this year was lowered by 1.4 percentage points to 2.3%, and the US growth forecast for next year was also lowered by 1.3 percentage points to 1.0%.
The Consumer Confidence Index for July released by the Conference Board recorded 95.7. This was lower than the previous record of 98.4 and the Economist’s estimate of 97.0 compiled by the Wall Street Journal (WSJ). The index fell for the third straight month, hitting its lowest level since February 2021.
US home prices are slowing. The seasonally-adjusted May National Home Price Index, compiled by S&P CoreLogic Case-Shiller, rose 19.7% annually, the second straight month of decline.
Analysts in the New York Stock Exchange analyzed that concerns over the economic slowdown in the second half of the year due to the Fed’s tightening measures are being reflected in corporate earnings forecasts.
“Profit expectations are lowering,” said Stephanie Lang, chief investment officer at Homerich Berg.
“The Fed is maintaining its policy stance with the goal of weakening demand for goods and services, and if the Fed manages inflation and curbs demand, it could eventually lead to a weakening of sales for businesses,” he said. It is an area of concern,” he said.
The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) recorded 24.69, up 1.33 points (5.69%) from the previous day.