Stocks on Wall Street sank Tuesday after Home Depot warned of flagging sales, the latest discouraging signal for an economy under pressure. The S&P 500 fell 26.38 points, or 0.6%, to 4,109.90. The Dow Jones Industrial Average dropped 336.46, or 1%, to 33,012.14, and the Nasdaq composite slipped 22.16, or 0.2%, to 12,343.05. Home Depot fell 2.2% after saying its revenue weakened by more in the latest quarter than expected. It described broad-based pressures across its business following years of big growth, and it cut its forecast for sales this fiscal year given all the uncertainty going forward, the AP reports.
Other big retailers are scheduled to report their results later this week, including Target and Walmart. They’re under the microscope because resilient spending by US households has been one of the main positives keeping the economy from sliding into a recession. If it buckles, a recession may be assured, and the pressure is on because measures of confidence among shoppers have been on the decline. Manufacturing and other areas of the economy have already cracked under the weight of higher interest rates meant to bring down inflation. A separate report on Tuesday said that spending at US retailers across the country broadly rose last month, but not by as much as economists expected.
Energy producers were some of the heaviest weights on the market as Exxon Mobil dropped 2.4% and Chevron fell 2.3%. Big Tech stocks helped limit Wall Street's losses Tuesday despite the significant majority of stocks falling. Amazon gained 2%, and Google's parent company, Alphabet, rallied 2.6%. They were the two strongest forces pushing upward on the S&P 500 when nearly 90% of the stocks in the index fell. Also looming over Wall Street is the threat of the US government defaulting on its debt for the first time. That could occur as early as June 1 unless Congress agrees to raise the credit limit set for the nation’s borrowing.
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