Stock Market Today: Dow Stumbles as Consumer, Tech Struggle; Fed Decision Eyed By

© Reuters.

By Yasin Ebrahim

Fxgecko.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.

The Dow Jones Industrial Average slipped 0.82%, or 229 points, and the Nasdaq was down 1.9%, and the S&P 500 fell 1.2%

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 Fxgecko.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.

Fresh fears about the strength of the consumer pressured other retailers to fall sharply, led by Amazon (NASDAQ:AMZN), DLTR, ROST and TGT.

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.

Alphabet (NASDAQ:GOOGL), and Microsoft (NASDAQ:MSFT) fell more than 2% and Meta Platforms (NASDAQ:META) lost more than 4%.

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.

3M (NYSE:MMM) and General Electric (NYSE:GE) delivered quarterly results that surprised to the upside, sending their shares more than 5% higher.

Coca-Cola (NYSE:KO), meanwhile, upgraded its guidance after reporting quarterly results that beat on both top and bottom lines. Its shares were nearly 2% higher.

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.

General Motors (NYSE:GM), however, fell more than 3% after reporting second-quarter profit that fell short of Wall Street estimates as supply chain issues hampered deliveries in the quarter.

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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