U.S. Stocks Open Lower After Walmart Profit Warning Spooks Retailers

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U.S. Stocks Open Lower After Walmart Profit Warning Spooks Retailers
Credit: © Reuters.

By Liz Moyer

Investing.com -- U.S. stocks fell on Tuesday after Walmart’s profit warning spooked the retail sector, as investors braced for the Federal Reserve’s interest rate decision this week.

At 9:49 AM ET, the Dow Jones Industrial Average fell 73 points, or 0.2%, while the S&P 500 fell 0.5%, and the NASDAQ Composite fell 1%.

Walmart Inc. (NYSE: WMT ) said its profit would be hit by rising inflation that is forcing shoppers to make tradeoffs, spending more on necessities such as food and putting off discretionary purchases such as clothes, which happen to be higher margin products for the retailer. Shares fell 7%.

Other retailers were also taking a hit. Shares of Target Corporation (NYSE: TGT ) fell 3.5%, while shares of Kohl's Corp. (NYSE: KSS ) fell 4.9% and shares of Macy's, Inc. (NYSE: M ) fell 4.5%.

One bright spot on Tuesday was The Coca-Cola Company (NYSE: KO ), which raised its full-year forecast. Shares rose 2%. McDonald’s Corporation (NYSE: MCD ) shares were flat after beating comparable store sales expectations.

Shopify Inc. (NYSE: SHOP ) fell 15.9% after it said it would lay off 10% of its workforce. General Motors Company (NYSE: GM ) missed expectations and said it had a 40% drop in net income, adding it would curb spending and hiring. Shares of the automaker fell 2%.

The Fed’s interest rate decision is due Wednesday afternoon, with most expecting it to raise the benchmark rate another 0.75 percentage point. But investors will be focused on what officials say about the economy, especially Chair Jerome Powell.

Oil rose. Crude Oil WTI Futures was up 1.2%, to $97.84 a barrel, while Brent Oil Futures rose 1.4%, to $101.61 a barrel. Gold Futures was flat at $1,719 an ounce.

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