S&P 500 slumps as rout in retailers, tech bites
By Yasin Ebrahim
Investing.com -- The S&P 500 slid Tuesday, as a slump in retailers and surging Treasury yields put the squeeze on the growth sectors of the market including tech amid growing fears that further Federal Reserve rate hikes will be needed to cool inflation.
The S&P 500 was down 1.8%, the Dow Jones Industrial Average fell 1.9%, or 638 points, and the Nasdaq Composite slumped 2.2%.
The 10-year Treasury yield rallied to flirt with the 4% handle for the first time since Nov. 10 as investor expectations for a cut this year dwindle and fears grow that the Fed peak level of rates could be higher than expected.
With a March and May hike nearly priced in, the odds of a June hike increased to 59%, compared with 50% last week, according to Investing.com’s Fed Rate Monitor Tool . A June hike would lift rates beyond what the Fed previously projected in December.
Investors will look to the Fed’s minutes due Wednesday for further insight into the central bank’s thinking on monetary policy measures.
The surge in rates, meanwhile, continued to pierce through growth sectors including tech, with Apple Inc (NASDAQ: AAPL ), Alphabet (NASDAQ: GOOGL ), and Microsoft Corporation (NASDAQ: MSFT ) down about 2%.
Sentiment on chip stocks was dented by fresh signs of softer demand amid a report that Intel (NASDAQ: INTC ) delayed an order for semiconductors from Taiwan Semiconductor Manufacturing (NYSE: TSM ) until next year.
Consumer discretionary, meanwhile, was hurt by a slump in retailers following quarterly results from Home Depot and Walmart – major Dow components – that flagged concerns about the strength of the consumer.
Home Depot (NYSE: HD ) fell more than 6% after it reported fourth-quarter results that missed on the bottom line, and guided for 2023 earnings a share to decline by a mid-single-digit percentage, compared with Wall Street expectations for flat earnings.
In its post-earnings call, the home improvement retailer said it expected a “moderation in home-improvement demand,” amid “heightened inflation and rising interest rates, a tight labor market and moderating equity and housing markets.”
Walmart (NYSE: WMT ) cut intraday losses to trade about flat despite reporting guidance that fell short of expectations, while quarterly results beat on both the top and bottom lines.
The supermarket giant said in an earnings call that while “stubborn inflation” was hurting consumers, it is “gaining share across income cohorts, including at the higher end.”
General Mills (NYSE: GIS ) bucked the trend of disappointing outlooks from retailers after upgrading its full-year forecast on revenue and earnings, sending its shares more than 5% higher.
In other news, DocuSign (NASDAQ: DOCU ) slumped 10% after UBS downgraded the company to Sell from Neutral amid growth concerns.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.
Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb
Drop an image here or