US stocks fell on Tuesday after Walmart (WMT) earnings notice on Monday night and ahead of a slew of tech gains and the Fed’s latest policy statement on Wednesday.
At the closing bell, the benchmark S&P 500 lost 1.2%, while the Dow fell 0.7%.
The tech-heavy Nasdaq fell 1.9%, the index’s third straight session of losses, and the Nasdaq’s third straight day of losses outpaced those suffered by the S&P and the Dow.
Walmart stock (WMT) fell more than 7% after the retail giant cut its profit outlook for the second quarter and for the full year on Monday afternoon, citing rampant inflation and a resulting pullback in consumer spending on discretionary items.
“Rising levels of food and fuel inflation are affecting the way customers spend, and while we’ve made great strides in eliminating tough categories, apparel at Walmart USA requires more markdown dollars.” Doug McMillon, Walmart CEO in a statement. “We are now anticipating more pressure on general merchandise in the back half; however, we are encouraged by the start we are seeing in school supplies at Walmart US”
The warning sent by Walmart dragged other retailers along. Amazon (AMZN), Goal (TGT), and Dollar General (DG) each fell to 5%, 4% and 3%, respectively.
Shopify’s (SHOP) shares fell nearly 16% after the e-commerce giant said yes laying off approximately 10% of its global workforce after a hiring boom to meet the pandemic demand for online shopping.
“It is now clear that the gamble did not pay off,” CEO Tobi Lutke said in a statement. “What we see now is that the mix is back to roughly where the pre-Covid data would have suggested it should be at this point.”
Also weighing on sentiment was a disappointing report from General Motors (GM) early Tuesday, which showed second-quarter results fell short of Wall Street estimates. The Detroit-based automaker saw its net income fall 40% from a year ago during the period and said it was unable to deliver 95,000 vehicles due to parts shortages. Shares fell nearly 3%.
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Elsewhere in the markets, UBS (UBS) shares fell as much as 12% after the Swiss bank reported a lower-than-analyst-expected quarterly profit as market volatility weighed on investment banking revenue and the financial institution warn of a difficult second half of the year.
In economic news, the International Monetary Fund further downgraded its global growth forecast this year and warned of a “gloomier and more uncertain” amid worse-than-expected inflation. The organization now expects the global economy to grow just 3.2% this year, down from the 3.6% it previously forecast in April when it cut expectations for 2022 from 4.4% to 3.6%
Federal Reserve officials also began their two-day policy meeting on Tuesday and are expected to do so raise interest rates another 75 basis points in its conclusion Wednesday afternoon.
Federal Reserve Chairman Jerome Powell will make his remarks at 2:30 pm ET shortly after the US central bank’s policy decision comes out at 2:00 pm ET.
WASHINGTON, DC – JUNE 22: Jerome Powell, Chairman of the Board of Governors of the Federal Reserve System, testifies before the Senate Banking, Housing and Urban Affairs Committee on June 22, 2022 in Washington, DC. Powell testified about the Semiannual Monetary Policy Report to Congress during the hearing. (Photo by Win McNamee/Getty Images)
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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