By Yasin Ebrahim
Investing.com -- The Dow fell Tuesday as tech slipped and retailers were under siege after a profit warning from Walmart stoked worries about the consumer and the broader economy ahead of the Federal Reserve decision due Wednesday.
Walmart (NYSE: WMT ) slipped more than 7% after cutting its outlook on profit as inflation puts the squeeze on consumer spending. The retailer forecast earnings per share to decline between 11% to 13%, down from “flat” previously.
The gloomy update from Walmart is “clearly telling you that [economic] conditions are deteriorating, which is why the market has sold off a lot today,” Will Rhind, founder and CEO, GraniteShares told Investing.com in an interview on Tuesday.
“Consumers are getting squeezed because the cost of goods and services is rising and the cost to borrow money is going up," he added.
As well as the profit warning from Walmart, data showing a slip in consumer confidence added to concerns about a slowing economic growth just as the Federal Reserve kicks off its two-day meeting .
“A 75 basis point hike is probably almost priced in,” says Rhind, but commentary from Fed Chairman Jerome Powell about the state of the economy, the future direction of interest rates “will be more important.”
Tech, meanwhile, also dragged the market lower as investors appear to be wary of making bullish bets on big tech as Alphabet and Microsoft are set to get megacap tech earnings underway.
Shopify (NYSE: SHOP ) fell about 14% lower after detailing plans to shed about 10% of its workforce following a decline in online spending.
On the earnings front, investors digested mostly positive quarterly results.
McDonald’s Corporation's (NYSE: MCD ) better-than-expected quarterly profit offset weaker revenue as price hikes supported strong performance in its U.S. business amid ongoing cost pressures. Its shares climbed 2% higher.
In other news, Coinbase (NASDAQ: COIN ) fell more than 20% on reports that the cryptocurrency exchange is facing a probe from the U.S. Securities and Exchange Commission over whether it allowed users to trade unregistered securities.
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