Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

US stock markets fall sharply as investors worry about recession

US stock markets fall sharply as investors worry about recession

Dow Jones sinks more than 1,100 points as S&P closes down 4%, its largest fall since June 2020, and Nasdaq loses 4.7%
The wild ride on the US stock markets continued on Wednesday with the Dow Jones Industrial Average sinking more than 1,100 points as investors worried about a looming recession.

All of the major US markets fell sharply, with the S&P closing down 4%, its largest fall since June 2020, and the tech-heavy Nasdaq losing 4.7%.

On Tuesday markets had rallied following positive news about consumer spending and signs that China was relaxing its strict Covid-19 lockdowns. Just a day later concerns about an economic slowdown triggered a wide-ranging sell-off.

The sell-off began after Target said supply chain costs and inflationary pressures had cut into its profits and customers were buying fewer higher-margin items such as kitchen appliances, televisions and furniture.

The retailer’s announcement came a day after Walmart said its profit had also been hit by higher costs. The latest news from Target led to a sell-off for retailers including Amazon, BestBuy, Costco and Dollar General.

Investors are increasingly concerned that rising inflation, and the Federal Reserve’s plans to tackle it by sharply hiking interest rates, will trigger a recession.

The concerns are affecting markets all over the world with the ASX200 in Sydney dropping 1.75% on Thursday in the wake of the Wall Street action. Stocks in Tokyo, Hong Kong and Seoul were all braced for losses later in the day.

Target’s management expects inflation to add $1bn to its fuel and freight costs this year and sees little sign of those costs easing throughout 2022. Gas prices topped $4 a gallon in every state this week for the first time.

“Throughout the quarter, we faced unexpectedly high costs, driven by a number of factors, resulting in profitability that came in well below our expectations, and well below where we expect to operate over time,” said Target’s chief executive, Brian Cornell.

The sell-off was broad-based. Tech companies including Apple, Meta and Tesla fell sharply, as did the makers of household goods and grocery stores including Kroger and Procter & Gamble. General Motors and American Airlines fell along with banks including JP Morgan and Goldman Sachs.

Stocks have been struggling to pull out of a slump over the last six weeks as concerns pile up for investors. Trading has been choppy on a daily basis and any data on retailers and consumers is being closely monitored by investors as they try to determine the impact from inflation and whether it will prompt a slowdown in spending. A bigger than expected hit to spending could signal more sluggish economic growth ahead.

The Fed is trying to temper the impact from the highest inflation in four decades by raising interest rates. On Tuesday, the Fed chair, Jerome Powell, told a Wall Street Journal conference that the US central bank will “have to consider moving more aggressively” if inflation fails to ease after earlier rate hikes.

Investors are also concerned about global growth as Russia’s invasion of Ukraine puts even more pressure on prices for oil and food while lockdowns in China to stem Covid-19 cases worsens supply chain problems.

The United Nations is significantly lowering its forecast for global economic growth this year from 4% to 3.1%. The downgrade is broad-based, which includes the world’s largest economies such as the US, China and the EU.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Russia’s A7 Builds a State-Linked Payments Network Beyond Western Sanctions
AI’s Next Bottleneck Is Power, Not Just Nvidia Chips
Meta Raises AI Spending Target to as Much as $145bn Despite Pressure Over Returns
Danube Drought Exposes Nazi Wrecks and Pushes Central Europe’s Power System to the Brink
Joe Biden’s Cancer Has Spread Beyond His Bones, Hunter Biden Says
Why 2027 Could Be a Strong Year for Stocks—and Why the Forecast Is Fragile
Why Markets May Look Quiet in August After Big Tech Earnings
UK Drought Cuts Harvests and Raises Food-Security Fears
UFO: Pentagon Releases Video of Unidentified Object Tracked Over Middle East
Ukraine Tells Senate Republicans Its Drone War Offers a Blueprint for America
Weight-Loss Drug Boom Tests the Limits of Prescription Advertising Rules
Senate Scrutinises AI-Driven Personalised Pricing
Spain Seeks Mainland Transfers for 1,100 Children Stranded in Ceuta
Spain and Morocco Trade Blame After 72,000 Migrants Enter Ceuta
AI Is Remaking the US Economy, From GDP Growth to iPhone Prices
Europe’s Heat and Drought Are Now Disrupting Power, Shipping and Tourism
Europe’s Drying Rivers Trigger Power Cuts, Factory Shutdowns and Wildfire Emergencies
Record-Low Danube Forces Nuclear Cuts and Emergency Power Curbs
Danube Drought Forces Hungary’s Paks Nuclear Plant Into Full Shutdown
Ceuta Death Toll Rises as Spain and Europe Clash Over Border Response
Valued at $109 Million: F-35B Fighter Jet Crashes in Southern California
Record-Low Danube Exposes Probable Mammoth Remains in Bulgaria
US Says It Has Carried Out Heavy Strikes on Iran After Attempted Attacks on Its Forces
The AI User Nightmare: Private Claude Conversations Leaked to the Internet
Over 24 Hours in the Air: Qantas Airbus Completes Record-Breaking Test Flight
Massive Wildfires Ravage Southern Europe: Fatalities in Greece and Evacuations Across France, Spain, and Turkey
Nvidia Reportedly Takes Vast Texas Data-Centre Lease to Underwrite AI Expansion
FIFA’s Private-Investment Plan for World Cup Rights Draws European Revolt
Apple Briefly Crosses Five Trillion Dollar Valuation as Investors Retreat From AI Bets
Fresh Heatwave Threatens to Rekindle France’s Historic Wildfire Crisis
Following OpenAI's Cyberattack: 'Most Companies Still Do Not Understand What Is Coming'
OpenAI Sued After ChatGPT Allegedly Discouraged Emergency Care Before Near-Fatal Embolism
Miliband Sets Climate and International Law at Centre of UK Diplomacy
Czech Central Bank Governor Rejects Early Euro Entry and Rate-Cut Pressure
Trump Readies New Tariffs as Temporary Global Levy Nears Expiry
Vivienne Westwood Casts Cicciolina, 74, in Its New Autumn Campaign
Dejavu: Germany’s Military Expansion Reshapes Europe’s Strategic Balance With France
Morgan Stanley Builds a Wall Street Lead in AI Infrastructure Finance
High Prices Push Coffee Drinkers Toward Whole Beans and Home Brewing
Trump Draws Boos and Podium Scrutiny at Spain’s World Cup Triumph
Brilliant move: Péter Magyar Moves to Nominate Chess Grandmaster Judit Polgár as Hungary’s President
Spain Defeats Argentina in Extra Time to Win Second World Cup
Current AI Seeks to Build an Open Global AI Infrastructure Outside Big Tech Control
Germany’s Economic Malaise Reopens the Sunday Shopping Debate
Proposed U.S.-Saudi Nuclear Pact Could Permit Limited Uranium Enrichment Under International Safeguards
Netherlands Declares Water Shortage Emergency After Drought Pushes Rivers to Historic Lows
Why Kentucky Fried Chicken Became KFC—and Why the False Explanations Persist
Ukrainian Drones Strike Wildberries Warehouses Deep Inside Russia
Reported CIA Mission Helped Clear the UAE’s Path to Advanced US AI Chips
Artificial Intelligence Capital Fuels Markets While Governments and Regulators Face Mounting Strategic Tests
×