Wall Street fell sharply in late trading Tuesday, as earnings warnings by Walmart dragged retail stocks down and very weak consumer confidence data also stoked worries about spending.
The Dow Jones Industrial Average shed 228.5 points, or 0.71 percent, to settle at 31,761.54 points. The S&P 500 index lost 45.79 points, or 1.15 percent, to end at 3,921.05 points. The Nasdaq Composite Index closed down 220.09 points, or 1.87 percent, to 11,562.58 points.
Walmart shares slumped 7.6 percent after the retailer cut its full-year profit forecast late Monday (25/7). Walmart blamed the spike in prices for food and fuel, and said it needed to cut prices to reduce inventories.
Target Corp fell 3.6 percent and Amazon.com Inc slumped 5.2 percent, while the S&P 500 retail index slipped 4,2 percent.
On Tuesday (26/7), data showed US consumer confidence fell to a nearly 1.5-year low in July amid persistent concerns about higher inflation and rising interest rates.
"That's what happened. But of course there are some caveats, and that's what the market is focused on," said chief market economist at Spartan Capital Securities. in New York.
Amazon, which said it will raise costs for shipping and services in Europe by 43 percent annually, was the biggest drag on the Nasdaq and S&P 500, while non-primary consumers fell 3.3 percent and led the declines among the S&P 500 sectors.
The Federal Reserve begins a two-day meeting, and on Wednesday is expected to announce an interest rate hike of 0.75 percentage point to fight inflation. Investors worry that aggressive rate hikes by the Fed could push the economy into recession.
A busy week for earnings reports also included reports from Alphabet Inc and Microsoft Corp after the closing bell.
Microsoft shares fell 0.5 percent in after-hours trading, while Alphabet gained 3.0 percent following the company's results. Microsoft ended the regular session down 2.7 percent and Alphabet ended 2.3 percent lower on the day.
Investors have been looking to see if news of this week's earnings report from the mega-cap company can help the stock market sustain its recent rally. this.
Profits from S&P 500 companies are expected to have increased 6.2 percent for the second quarter from a year ago, according to Refinitiv data.
Also during the regular session, Coca-Cola Co. rose 1.6 percent after the company raised its full-year earnings forecast. McDonald's Corp. rose 2.7 percent after beating quarterly expectations.
3M Co rose 4.9 percent after the industry giant said it plans to divest its healthcare business. General Electric Co. rose 4.6 percent after the industrial conglomerate beat revenue and profit forecasts.
In another view, the International Monetary Fund (IMF) cut its global growth forecast again.
Volume on US exchanges was 9.60 billion shares, compared with the 10.93 billion average for the full session over the last 20 trading days.