Global stocks fell on Tuesday, giving back some of Monday’s gains and returning to the downward drift in recent weeks, as investors weighed mixed economic reports and company earnings.
Monday’s rally had been the strongest start to a week since January, Jim Reid of Deutsche Bank noted, “so much so that there’s hope that the successive weekly losing S&P streak of seven might be ended.” But then, “just when you thought it was safe to emerge from behind the sofa,” he wrote, stocks were set to fall.
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The S&P 500 fell 0.8 percent, bringing its drop from its Jan. 3 high to 17.8 percent. The Nasdaq composite, which is heavily weighted toward tech stocks that have led the monthslong slide in stock prices, fell 2.3 percent.
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The yield on the 10-year Treasury note, a key benchmark for borrowing costs, fell 10 basis points, or about 0.1 percentage points, to about 2.76 percent, as demand rose for safer assets. (Yields, or the return on bonds, fall when prices for bonds rise.)
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Snap, the maker of the messaging app Snapchat, said on Monday that it would miss its quarterly goals for sales and profit, citing inflation, interest rates, supply chain shortages and more. Snap’s shares were down 43 percent on Tuesday, with other tech platforms that rely on advertising, like Alphabet and Meta, also taking hits.
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Abercrombie & Fitch fell 28.6 percent after the apparel company reported a loss of $14.8 million in the three months ending in April amid higher costs for transportation and products. The company also slashed its sales forecast for the year from its previous outlook. Other retailers fell on the news, with Urban Outfitters and American Eagle Outfitters down 7.9 percent and 6.3 percent.
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“The market and investors are having these kneejerk reactions because there’s so much uncertainty about what the future of growth looks like for the economy and for corporations,” said Lindsey Bell, the chief money and markets strategist at Ally Invest. “You got retailers pointing to inflation as the reason for their weaker earnings results, so there’s a question mark about the health of the consumer.”
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The electronics retailer Best Buy reported results on Tuesday that beat analyst expectations, pushing its shares up 1.2 percent. Although the company’s sales fell in its most recent quarter, the scale of the decline signaled that shoppers may not be as unnerved by inflation as some had feared after downbeat earnings from Walmart and Target last week.
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In Europe, the Stoxx 600 index fell 1.1 percent, after business surveys showed that large economies like France and Germany continue to expand, albeit at a slower pace than in recent months. In Japan, a similar survey showed deteriorating conditions for manufacturers, with a sharp increase in delivery times related to shortages and pandemic lockdowns in China. Japan’s Nikkei 225 index fell 0.9 percent, China’s CSI 300 dropped 2.3 percent and Hong Kong’s Hang Seng lost 1.8 percent.
