Live news updates: SK Hynix reports 56% jump in profit on weaker Korean won and strong demand2 min read
Shares in US retailers led Wall Street lower on Tuesday after Walmart warned that higher inflation would hurt its profits.
The broad S&P 500 share index shed 1.2 per cent, with consumer cyclical stocks suffering the sharpest declines.
Walmart’s share price dropped 7.6 per cent after the big-box retailer issued its second profit warning in 10 weeks.
In an update after Monday’s closing bell, it said rising prices for fuel and food were weighing on demand for less essential items such as clothing.
The technology-heavy Nasdaq Composite index fell 1.9 per cent. Recession fears and jitters ahead of earnings updates from some of the world’s largest technology companies combined to darken the market mood.
In Europe, the euro weakened against the dollar and government bonds rallied after Russia moved on Monday to further cut gas supplies to the EU and the IMF slashed its global growth forecasts.
The common currency dropped 1 per cent to $1.012, having fallen to parity with the US dollar earlier this month, as energy security concerns related to the war in Ukraine heightened anxiety about a recession in the region.
“Geopolitical developments in Ukraine have exacerbated the inflationary dynamic,” said Candice Bangsund, a multi-asset portfolio manager at Fiera Capital.
“The eurozone economy looks particularly vulnerable, given its dependence on Russian energy,” she added. “So the outlook for the eurozone has deteriorated alongside those soaring natural gas prices.”
Germany’s 10-year Bund yield, the benchmark for eurozone borrowing costs, fell 0.09 percentage points to 0.87 per cent, according to Tradeweb data. Bond yields fall as prices rise.
Read more about the day’s market moves here.