Wall Street stock indices plunged Wednesday as a growth stock rally reversed amid concerns about economic growth. This was highlighted by a 26% plunge in Target Corp stocks after the retailer became the latest victim of rising prices.

Target’s first-quarter profit halved, and the company warned of a wider margin due to rising fuel and freight costs. Shares were heading for their biggest drop since the Black Monday crash on Oct. 19, 1987, and came a day after rival Walmart cut its earnings forecast.

Rising inflation, the conflict in Ukraine, protracted supply chain turmoil, pandemic-related lockdowns in China, and the prospect of aggressive policy tightening by central banks have weighed on markets lately.

The Nasdaq 100 fell the most among major benchmarks as growth-related technology stocks tumbled. The Dow Jones Industrial Average lost 1,029 points, or 3.2%, averaging its first loss in four days. The S&P 500 was down 3.6%, while the Nasdaq Composite fell 4.3%.

Shares of Target Corp. fell 25.1% to the bottom of the S&P 500 after profits halved in the first quarter, and the company warned of a wider margin amid rising fuel and freight costs.

Shares of other retailers such as Walmart Inc, Gap Inc, Kohl’s Corp, Nordstrom Inc, Costco, Best Buy, Macy’s Inc, and Dollar General Corp fell between 4.1% and 11.8%.

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All 11 major S&P sectors fell in morning trading, with consumer staples and consumer discretionary falling 3.5% each.

“Input costs are very important to retailers. Until the supply chain disruption is resolved and labor costs are reduced, we will continue to see retailers struggle,” said Brooke May, managing partner at Evans May Wealth in Indianapolis.

Rising inflation, the conflict in Ukraine, protracted supply chain turmoil, pandemic-related lockdowns in China, and the prospect of aggressive policy tightening by central banks have weighed on markets of late, fueling concerns about a global economic slowdown.

Federal Reserve chairman Jerome Powell told the Wall Street Journal on Tuesday that the US central bank will continue to “push” rate hikes until it sees inflation fall in a “clear and convincing way,” not hesitating to act more aggressively if that is not the case. to happen.

Traders anticipate a 50 basis point rate hike by the Fed in June and July.

“The market is very concerned about higher interest rates and that the Fed may overshoot and weaken the economy,” May said.

“Higher rates will come at the expense of retail sp and corporate profits, and the market is trying to digest that.”

The S&P 500 is down 15.6% in 2022, and the Nasdaq is down more than 24%, hit by growth stocks.

Stock-sensitive Big Tech and growth companies such as Microsoft Corp, Apple Inc, Google-owned Alphabet Inc, Meta Platforms, Tesla Inc, and Amazon.com fell between 1.7% and 4% after a sharp rally on Wall Street in the previous session.

Lowe’s Cos Inc fell 2.1% after reporting a larger-than-expected decline in same-store sales as demand for its home improvement tools, and building materials slumped after pandemic highs.

However, TJX Cos Inc rose 11% after the discount store operator forecasted positive annual profits helped by price increases.

The CBOE volatility index, also known as the Wall Street fear meter, rose to 27.84 points after falling for six consecutive sessions.

The number of declining issues outpaced the avant-garde with a 2.76-to-1 ratio on the NYSE and a 1.94-to-1 ratio on the Nasdaq.

The S&P index recorded one new high in 52 weeks and 30 new lows, while the Nasdaq recorded 26 new highs and 90 new lows.

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