Stock indexes were in the red from early Tuesday as traders reacted to Walmart’s announcement.
The S&P 500 fell 45.79 points to 3,921.05. The Dow lost 228.50 points to end at 31,761.54. The Nasdaq fell 220.09 points to 11,562.57.
Major indexes are posting solid gains last week fueled by mostly better-than-expected corporate earnings reports. Falling bond market yields also helped, easing pressure on stocks after expectations of rate hikes by the Federal Reserve pushed yields higher for much of this year.
The central bank is expected to announce a rate hike of up to three-quarters of a percentage point on Wednesday, triple the usual amount. The central bank is waging an aggressive campaign to curb four-decade high inflation. The expected increase would put the Fed’s benchmark rate in a range of 2.25% to 2.5%, the highest since 2018.
Bond yields were mixed on Tuesday. The two-year Treasury yield, which tends to move with Fed expectations, rose to 3.04% from 3.02% late Monday. The 10-year yield, which influences mortgage rates, fell from 2.82% to 2.80%.
Technology stocks, retailers and communications companies are among the biggest drags on the benchmark S&P 500. Microsoft fell 2.7%, Amazon fell 5.2% and Facebook owner Meta Platforms, down 4.5%.
Losses easily outpaced gains in health care and utilities stocks. Shares of small companies also fell. The Russell 2000 lost 12.53 points, or 0.7%, to end at 1,805.25.
Investors watched the latest batch of corporate earnings reports on Tuesday.
Shares of automaker General Motors fell 3.4 percent after the company said its second-quarter profit fell 40 percent from a year ago as shortages of chips and parts ‘computer slowed down factory production and caused the company’s US sales to drop by more than 15%.
The Detroit automaker earned $1.67 billion ($2.4 billion) from April to June, well below the $2.79 billion it earned a year earlier. GM couldn’t deliver 95,000 vehicles during the quarter because it didn’t have parts.
Shopify fell 14.1 percent after the Canadian e-commerce company said it is cutting 10 percent of its workforce, or about 1,000 employees, as it braces for an unexpected drop in sales after growth driven by the pandemic.
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Tech highlights Meta, Apple and Amazon report quarterly results later in the week.
“We’re going to have a lot of big technology gains later this week and we’re going to have a better idea of how this whole industry is going to go,” Frederick said. “Maybe people are hedging a little bit ahead of this big onslaught of tech gains that we’re going to get this week, plus obviously there’s concern about the Fed tomorrow.”
AP