Wall Street slipped from record highs
Wall Street declined sharply from its peaks on Tuesday after weak retail sales in the United States. It raised fears of the impact of the Delta variant on economic activity.
The Dow Jones Industrial Average ended with a loss of 0.79% or 282 points, to 35,343. The S&P 500 fell by 0.71% or 31.63 points, to 4,448.08. Meanwhile, the Nasdaq slumped by 0.93% or 137.58 points to 14,656.18.
The Fed is not certain how the Delta outbreak will influence recovery
In a virtual town hall Tuesday, Federal Reserve Chairman Jerome Powell said it wasn’t yet clear whether the delta strain of COVID-19 will significantly impact the US economy.
The day marked a great contrast to the day before when the stock market scored two new records. The S&P 500 achieved a milestone by doubling its valuation compared to its lowest pandemic point in March 2020.
Since the beginning of August, traders seemed to have relied on the good earnings season.
Experts note that the spread of the delta variant continues to worry and that there are expectations for the meeting of central banks in Jackson Hole later this month.
Ian Shepherdson, an economist for Pantheon Macroeconomics, stated that the Delta variant hit harder in August. So, the consumer spending forecast will lower for the third quarter drastically.
Consumer spending in the United States accounts for three-quarters of GDP and is the engine of growth for the world’s largest economy.
Industrial production grew more sharply than expected in July, adding +0.9%.
The stock of the number one retailer Walmart was flat at $150.78 after announcing net earnings per share slightly below expectations.
DIY chain Home Depot fell by 4.49% to $320, despite better than expected results.
Investors neglected the automotive sector. Ford slipped by 3.05%, and GM lost 4.78%, meanwhile car sales fell in July by 3.9%.
Airlines have been affected by covid-19 restrictions. American Airlines and United Airlines have sunk more than 2%.
Vaccine makers Moderna advanced by 7.49%, Pfizer lost 3.05%, and Johnson and Johnson increased by 0.92%.
