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Markets Today

  • S&P 500 (SPY): -1.18%
  • Nasdaq (QQQ): -1.97%
  • Dow Jones (DIA): -0.75%
  • Russell 2000 (IWM): -0.64%
  • Volatility Index (VIX): +5.69%
  • Apple (AAPL): -0.91%
  • Microsoft (MSFT): -2.75%
  • Amazon (AMZN): -5.23%
  • Walmart (WMT): -7.62%
  • Gamestop (GME): -4.56%
  • AMC Entertainment (AMC): -6.14%
  • Shopify (SHOP): -13.38%
  • Coinbase (COIN): -20.99%
  • Sundial (SNDL): -19.30%

Market Recap 

US stocks resumed their slide on Tuesday after Walmart’s (WMT) failed earnings and ahead of a rush of earnings for large technology companies and the Fed’s latest interest rate decision on Wednesday. The price of crude oil stayed steady under $100 per barrel while the benchmark 10-year Treasury yield hovered around 2.80%

Shares of Walmart (WMT) fell over 7% after the retail giant slashed its second quarter and full-year profit outlooks late Monday, citing rampant inflation and a resulting pullback in consumer spending on discretionary items. This report dragged down other retailers such as Target (TGT), Costco (COST), Dollar General (DG), and Amazon (AMZN). 

CEO Doug McMillon said in a statement, “The increasing levels of food and fuel inflation are affecting how customers spend, and while we’ve made good progress clearing hardline categories, apparel in Walmart U.S. is requiring more markdown dollars. We’re now anticipating more pressure on general merchandise in the back half; however, we’re encouraged by the start we’re seeing on school supplies in Walmart U.S.” 

Also weighing on sentiment was a disappointing report from General Motors (GM) early Tuesday that showed second-quarter results fell short of Wall Street estimates. The Detroit-based automaker saw its net income fall 40% from a year ago during the period and said it failed to deliver 95,000 vehicles due to part shortages. Shares fell nearly as much as 3%.

In economic news, the International Monetary Fund (IMF) once again downgraded forecasts for global growth this year and warned of “gloomy and more uncertain” circumstances amid the fastest pace of inflation in forty years. The organization now projects the global economy will grow by only 3.2% this year, a downgrade from the 3.6% it had previously forecast in April when it cut expectations for 2022 to 3.6% from 4.4%.

Federal Reserve officials also kicked off their two-day policy meeting Tuesday and are expected to raise interest rates another 75 basis points at its conclusion Wednesday afternoon. Federal Reserve Chair Jerome Powell is set to deliver remarks at 2:30 p.m. ET shortly after the U.S. central bank’s policy decision comes out at 2:00 p.m. ET.

In earnings news, Microsoft (MSFT) reported earnings that missed expectations on both the top and bottom line. Shares roughly flat after-hours at the time of writing. 

  • Revenue: $51.9 billion versus $52.4 billion expected
  • Earnings per share: $2.23 versus $2.29 expected
  • Productivity and Business Processes: $14.4 billion versus $16.7 billion expected
  • Intelligent Cloud: $20.9 billion versus $21.1 billion expected
  • More Personal Computing: $14.4 billion versus $14.7 billion expected

Google parent company Alphabet (GOOG, GOOGL) also reported earnings that missed Wall Street estimates after the closing bell on Tuesday, though shares popped roughly 2.5% after the release of the report. 

  • Earnings per share (EPS): $1.21 vs $1.28 expected
  • Revenue: $69.69 billion vs $69.9 billion expected
  • YouTube advertising revenue: $7.34 billion vs.$7.52 billion expected
  • Google Cloud revenue: $6.28 billion vs. $6.41 billion expected
  • Traffic acquisition costs (TAC): $12.21 billion vs$12.41 billion expected

Highlights

  • Shopify’s (SHOP) stock nosedived nearly 16% after the e-commerce giant said it was laying off roughly 10% of its global workforce after a hiring boom to meet pandemic demand for online shopping. “It’s now clear that the bet didn’t pay off,” CEO Tobi Lutke said in a statement. “What we see now is the mix reverting to roughly where pre-Covid data would have suggested it should be at this point.”
  •  UBS (UBS) shares fell as much as 12% after the Swiss bank reported a smaller quarterly profit than analysts anticipated as market volatility weighed on investment banking revenues and the financial institution warned of a challenging second half of the year.
  • Shares of Coinbase (COIN) collapsed 20% after the Securities and Exchange Commission (SEC) opened an investigation to probe whether the company improperly let Americans trade digital assets online. 
  • Tesla (TSLA) announced it was launching a new Shareholder Platform, which would allow investors to participate in events and receive other benefits, though details remain sparse. 
  • : In an attempt to better compete with TikTok, Meta has introduced a new monetization feature that allows creators to use licensed music from popular artists in their Facebook videos and earn a share of in-stream ad revenue, according to a Meta Press Release.
  • Meta will raise prices on Quest 2 headsets by $100, starting August 1 of this year
  • The U.S. auto safety agency said Tuesday it was opening five investigations into more than 1.8 million Stellantis, Ford Motor and General Motors vehicles over stalling and other issues.

“You have brains in your head. You have feet in your shoes. You can steer yourself in any direction you choose.” -Dr. Seuss