NEW YORK (AP) — U.S. stocks are falling Wednesday, led by Target, which lost more than a fifth of its value after the retailer gave a dour forecast for the holiday shopping season.
The S&P 500 was down 0.7%, as of 2:16 p.m. Eastern time. The Dow Jones Industrial Average slipped 111 points, or 0.3%, while the Nasdaq composite sank 0.9%.
Target's 20.6% drop followed its report showing weaker profit and revenue for the latest quarter than analysts expected. The retailer also gave a forecast for profit in the upcoming holiday season that was below analysts’ estimates.
Target’s performance stood in stark contrast to rival Walmart, which reported another quarter of stellar sales Tuesday and released optimistic projections for the holiday season.
Hints about how U.S. consumers are doing are under particular scrutiny, given that they'll need to keep spending if the U.S. economy is to continue to avoid a recession. Shoppers are contending with high prices across the economy and still-high interest rates.
Besides Target, several lower-priced retailers were among the biggest losers in the S&P 500. Dollar General fell 3.7%, and Dollar Tree sank 3.5%.
On the winning end of Wall Street was Williams-Sonoma, which jumped 27.4% after the home retailer delivered better profit and revenue for the latest quarter than analysts expected. The parent of Pottery Barn also said it expects overall sales to fall by less this fiscal year than it had earlier forecast.
The headliner of the day, week and perhaps the rest of the year for Wall Street will arrive after trading ends for the day. That’s when superstar stock Nvidia will unveil its results for the latest quarter.
The company has grown into a $3.6 trillion behemoth because of nearly insatiable demand for its chips used in artificial-intelligence technology. It’s grown so fast, with its stock nearly tripling for the year through Tuesday, that pressure has grown for it to show it can keep leapfrogging past analysts’ already high expectations.
So far, Nvidia has hurdled such expectations with impressive results each quarter. That’s made it one of the most influential stocks in the market, whose movement can almost singlehandedly alter the S&P 500’s direction.
Trading in the options market suggests Nvidia’s upcoming profit report is the most anticipated event left in 2024, more than even the Federal Reserve’s upcoming meeting on interest rates, according to Barclays Capital.
Outside of Nvidia, financial markets are still absorbing the impacts of Donald Trump’s victory in the presidential election earlier this month.
Wells Fargo Investment Institute on Wednesday raised its forecasts for where Treasury yields will end next year, in part because of expectations that Trump’s policies will drive faster U.S. economic growth and inflation. Strategists at the institute also raised their forecast for where the S&P 500 will end next year because of that faster growth, which should translate into bigger corporate profits, along with easier regulations.
Treasury yields held relatively steady in the bond market. The 10-year yield rose to 4.41% from 4.40% late Tuesday. It has been generally rising from less than 3.70% in September.
In stock markets abroad, indexes moved modestly across much of Europe and Asia.
The FTSE 100 in London slipped 0.2% after the Office for National Statistics reported the inflation rate picked up to a six-month high in October.
Japan’s Nikkei 225 slipped 0.2% after the Finance Ministry reported the country recorded a trade deficit in October for a fourth straight month.
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AP Writer Zimo Zhong contributed.
