US stock indices closed sharply lower on Wednesday. The S&P 500 has collapsed the most since June 2020. The negative reporting of the largest retailers strengthened investors’ fears of a recession. The US stock market fell sharply on Wednesday, which was the worst day since 2020 for two of the major indices (DJIA and S&P 500). The DJIA fell 3.57%, the high-tech Nasdaq plunged 4.73%, and the broad market S&P 500 fell to a record 4.04% since June 2020. Major retailers said on Wednesday that rising prices, sluggish sales and supply issues are hurting their bottom line, writes DJ Newswires. Target lost nearly 25%, while Dollar Tree, Dollar General and Costco Wholesale saw their biggest one-day decline in years (since 2003 in Costco’s case). Against the backdrop of these disappointing results, investors have once again begun to speculate that the global economy is heading for a recession. The latest data showing the impact that inflation is hitting US consumers has only made matters worse. “Due to inflation, consumers are no longer buying the more expensive items they used to buy. This is evident in the company’s earnings report data,” NEIRG Wealth Management notes. Investors’ main attention is now focused on US inflation, which has reached 40-year highs, the actions of central banks planning to tighten monetary policy to combat such high inflation, and the consequences of these actions for economic growth. Fed chief Jerome Powell delivered a tough speech on Tuesday, saying that the central bank’s determination to fight inflation should not be called into question, even if this would lead to an increase in unemployment. Markets also continue to be negatively affected by the complex geopolitical environment that affects the dynamics of oil, as well as China’s actions to combat the coronavirus. Source: FXPro

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