U.S. stocks plummeted on Tuesday, putting the S&P 500 back on track for a bearish market as a strong streak of Wall Street resumed.
The S&P 500 fell 2.1% and the Dow Jones Industrial Average fell 400 points, or 1.3%. The Nasdaq Composite fell 3.3% amid renewed pressure on technology stocks following a disappointing outlook from the social networking platform Snap (SNAP), which lowered the company’s stock to 40% , getting her ready for her biggest day. leave on record.
Movements extend a streak of wild changes in stocks after a brief hiatus on Monday, but are based on a broader downward trend amid months of Wall Street sales. Monday’s close only marked the 13th time in 98 trading days this year that the S&P 500 closed in positive territory, according to Bespoke Investment Group.
Shares on Tuesday were fueled by pressure on technology stocks after Snap Inc. CEO Evan Spiegel cut the company’s forecast, citing rising inflation and interest rates. supply chain constraints and work interruptions.
The fall of Snap also dragged other tech mates. Shares of Meta Platforms (FB) fell as much as 10% and shares of Alphabet (GOOG) fell 6%.
The social media giant is the latest in a growing number of US companies to lower their prospects out of concern that macroeconomic pressures are about to weigh on margins. Last week, a disappointing profit group of major retailers expressed fears that inflation and continued supply chain problems were affecting corporate balance sheets.
“Surely there would be a recovery from the pandemic-induced profit increase experienced by many companies, but that recovery could be greater than initially thought,” said Brian Jacobsen, Allspring Global’s senior investment strategist. Investments in a note sent by email. “Businesses have to deal with higher input costs, reduced consumers due to high prices and changing spending patterns.”
During the first quarter earnings season, 338 of the 460 S&P 500 companies reporting results so far cited the term “supply chain” during investor calls, the third-highest number since at least 2010. , indicated a FactSet investigation. With the results to be released this week from consumer names like Macy’s (M), Dick’s Sporting Goods (DKS) and Ulta Beauty (ULTA), Wall Street is gearing up for more bad news.
The story goes on
There is also a series of economic data in line for investors until Friday, with a second estimate of U.S. GDP for the first quarter to be released later this week, along with a new reading on monthly personal consumption spending (PCE), the preferred inflation of the Federal Reserve. measure.
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10:58 am ET: New home sales are falling to a minimum since early 2020
New home sales in the United States fell more in almost nine years to the lowest impression since the start of the COVID-19 pandemic. The fall comes when high construction costs and rising mortgage rates weigh on affordability.
New home sales in the United States fell 16.6% month-on-month to a seasonally adjusted annual rate of 591,000 in April 2022. The figure marks the lowest impression in two years and is below of the 750,000 economists surveyed by Bloomberg who had predicted.
The pace of sales in March was also revised downwards to 709,000 units from the 763,000 units previously reported.
“The macroeconomic environment has deteriorated faster than we thought just a month ago, with new home sales falling under the weight of higher financing costs and home valuations, where even the cost of gas home buyers who put in the car to visit new homes is skyrocketing, “FWDBONDS chief economist Christopher Rupkey said in a statement.
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9:34 am ET: Shares pick up losses as strong sales continue on Wall Street
These were the main market movements at the start of trading on Tuesday:
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S&P 500 (GSPC): -40.20 (-1.01%) to 3,933.55
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Dow (^ DJI): -141.29 (-0.44%) at 31,738.95
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Nasdaq (^ IXIC): -209.61 (-1.82%) to 11,325.66
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Crude (LC = F): -0.20 $ (-0.18%) at $ 110.09 per barrel
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Gold (GC = F): $ 11.50 (+ 0.62%) to $ 1,859.30 per ounce
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10-Year Treasury (^ TNX): -4.9 bp for a yield of 2.8100%
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8:30 am ET: Abercrombie shares are down after gains
Shares of Abercrombie & Fitch (ANF) fell as much as 25% in pre-market trading after the company cut its full-year forecast in its latest quarterly report.
For the full year 2022, the company now expects sales growth to fall within a flat range of just 2%, below a previous 2% -4% sales growth forecast . In cutting its forecast, the company cited “the adverse impact of foreign currency and an alleged inflationary impact on consumer demand.”
After a 4% increase in sales during the first quarter, ANF expects second quarter sales to fall by “low digits” compared to the previous year. The company attributed the decline to the impact of COVID-19-related blockades in China, as well as the negative effect inflation is having on consumer habits.
“Looking to the future, we expect higher costs to continue to be a headwind at least until the end of the year,” CEO Fran Horowitz said in the company’s earnings statement.
“We expect a slowdown in freight transport in the fourth quarter, as the anniversary of the increase in air use last year due to the shutdown in Vietnam. We will continue to manage spending rigorously and we are We are committed to finding opportunities to offset these costs while protecting strategic investments in marketing, technology and our customer experience, which should drive sustained long-term sales growth. “
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7:17 am ET: Futures point to continued losses after Snap lowers forecast
Here is where the pre-market share futures were on Tuesday:
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S&P 500 futures (ES = F): -41.00 (-1.03%) to 3,930.75
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Dow futures (YM = F): -200.00 (-0.63%) to 31,639.00
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Nasdaq futures (NQ = F): -195.50 (-1.62%) to 11,839.75
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Crude (LC = F): + $ 0.41 (+ 0.37%) to $ 110.70
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Gold (GC = F): $ 8.50 (+ 0.46%) to $ 1,856.30 per ounce
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10-year Treasury (^ TNX): +7.2 bp for 2.8590% yield
NEW YORK, NEW YORK – MAY 23: People walk the New York Stock Exchange (NYSE) on May 23, 2022 in New York City. After a week of heavy losses, the markets went up to trading on Monday morning. (Photo by Spencer Platt / Getty Images)
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Alexandra Semenova is a Yahoo Finance journalist. Follow her on Twitter @alexandraandnyc
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