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Stock futures fall as retail sales beat, Target earnings miss

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US stock futures plunged Wednesday morning. Earnings alert from retail leader Set targets in light of government retail sales data showing strong consumer spending ahead of the major holiday season.

Futures linked to the S&P 500 (^GSPC) and the Dow Jones Industrial Average (^ DJI) fell flat, while the technology-focused Nasdaq Composite (^IXIC) was off by 0.2%.

the Department of Commerce said on Wednesday Retail sales jumped 1.3% in October Americans spent big on food, gas and big-ticket goods last month despite inflationary pressures. Economists surveyed by Bloomberg expected headlines to rise 1.0% after flat activity the previous month.

strong print Potential to derail the market’s uptrendinvestors are likely to interpret robust spending as a sign to Federal Reserve policymakers that aggressive rate hikes are likely to continue.

All eyes were on the target (target) as Q3 earnings missed by a wide margin and weak holiday quarter guidance led to a 15% plunge in premarket trading.Retailers said they were under pressure from a slowdown in consumer spending on discretionary goods, leading to store looting $400 million reduction in gross margin so far this year.

Target Chairman and CEO Brian Cornell said in the earnings call: Earnings performance in the third quarter was well below our expectations. ”

Elsewhere in the market, oil rose slightly while the US dollar fell. Russian missiles hit Poland Fears of an escalation of Russia’s war in Ukraine reignited on Tuesday. President Joe Biden met with NATO allies at the G20 meeting in Bali, Indonesia, on Wednesday. Eliminate concerns while advocating US officials help Poland investigate whether missiles were launched from Russia.

Back in domestic territory, stocks have held up so far this week after Thursday’s CPI drop spurred an outsize relief rally. Another key inflation indicator, the October Producer Price Index (PPI), rekindled that optimism Tuesday’s session, along with comments from recent Fed members suggesting a possible slowdown in rate hikes.

“Fezpeak is pretty fragmented at the moment, and depending on which official you ask, it’s either a hawk or a dove,” said Mike Lowengart, head of model portfolio construction at Morgan Stanley’s global investment office. We have to remember that we might get a point of view,” he said. in a note. “The market is also digesting how much inflation is hitting consumers, with key retail earnings outperforming expectations and retail sales coming closer.”

WASHINGTON DC – MAY 23: (LR) Federal Reserve Vice Chairman Lael Brainard shakes hands with Jerome Powell on May 23, 2022 in Washington, DC. (Photo by Drew Angerer/Getty Images)

Earnings-wise, non-Target retail earnings have beaten analyst estimates so far.

Home Center Lowes (low) Exceeding analyst expectations Wednesday. The stock was up nearly 2% from its opening price, even though the company capped its full-year earnings outlook.

Megastore Walmart (WMT) benefited from More Value Spend by Customers While stymied by a “massive” improvement in inflation and overstocking, higher prices helped offset a decline in Home Depot transactions (HD).

Another round of peers in the field is still to report, with results from the TJX company (TJXMore) and Victoria’s Secret (VSCO) scheduled for Wednesday. NVIDIA (NVDA) is another major headline in financial statements.

Digital World Acquisition Corporation (DWAC), the special-purpose acquisition firm set to merge with Donald Trump’s media company extended its run this week after the former president Officially participate in the 2024 presidential election Tuesday. The stock rose 5% in pre-market trading.

Alexandra Semenova is a reporter at Yahoo Finance. follow her on her twitter @alexandraandnyc

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