La Jornada – New York Stock Market falls to levels not seen since 2020

The disappointing results of several US retailers raised fears of damage to consumption and precipitated the fall of the indices on the New York Stock Exchange on Wednesday, in a day that analysts described as one of the worst since 2020.

A drop in consumption raises alarms given that the domestic market in the United States represents two thirds of the country’s economy.

The Dow Jones plunged 3.57 percent to 31,490.97 points, its lowest level since March 2021.

The S&P 500, for its part, lost 4.03 percent and was once again below four thousand points, standing at three thousand 924.18 units; it was the worst one-day loss for the S&P 500 since June 2020.

Meanwhile, the technological Nasdaq sank 4.73 percent to 11,418.15 points, which touched its level of November 2020.

The big names in technology also fell: Amazon lost 7.16 percent; Apple, 5.64 percent, and Netflix, 7.02 percent.

Target supermarkets lost 25%

The sharp drop in shares of Target supermarkets (-24.87 percent to $161.73) – a rare plunge in the retail sector – drew all the attention of investors, as it shows that the rise in prices begins to weigh on consumption and company profits.

Target’s first-quarter profit fell by half and the company warned of a further hit to margins from rising fuel and transportation costs.

On Tuesday, Walmart reported that its revenue grew 2.4 percent to $141.6 billion in the February-April quarter.

In the United States, however, customers bought fewer non-food items.

Inflation modifies buying habits

Walmart customers “tend to be more sensitive to price increases, and were more affected by strong inflation,” which in April remained at a 40-year high of 8.3 percent, said Neil Saunders of the consultancy Global Data.

In contrast, spending on food increased; is that with inflation, “more consumers went to Walmart to cut costs,” he noted.

“People are buying expensive products less and less, and turning to generic products,” said Gregori Volokhine of Meeschaert Financial Services.

“The (citizens with) small incomes shop at Walmart; median income is people who shop at Target. So (inflation) is starting to climb the pyramid,” he explained.

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